CREDIT AGREEMENT among ENDEAVOUR INTERNATIONAL CORPORATION, as Holdings ENDEAVOUR ENERGY UK LIMITED, as the Borrower, VARIOUS LENDERS, and CYAN PARTNERS, LP, as Administrative Agent Dated as of August 16, 2010 CYAN PARTNERS, LP, as Sole Arranger and...

Exhibit 10.4(a)

EXECUTION VERSION

 

 

CREDIT AGREEMENT

among

ENDEAVOUR INTERNATIONAL CORPORATION,
as Holdings

ENDEAVOUR ENERGY UK LIMITED,
as the Borrower,

VARIOUS LENDERS,

and

CYAN PARTNERS, LP,
as Administrative Agent

Dated as of August 16, 2010

CYAN PARTNERS, LP,
as Sole Arranger and Sole Book Runner

 

 

          CREDIT AGREEMENT, dated as of August 16, 2010, among Endeavour International Corporation, a Nevada corporation (“Holdings”), Endeavour Energy UK Limited, a United Kingdom private limited company (the “Borrower”), the Lenders party hereto from time to time and Cyan Partners, LP, as Administrative Agent. All capitalized terms used herein and defined in Section 1 are used herein as therein defined.

WITNESSETH:

          WHEREAS, subject to and upon the terms and conditions set forth herein, the Lead Arranger has arranged, and the Lenders are willing to make available to the Borrower, the senior secured term loan facility provided for herein;

          NOW, THEREFORE, IT IS AGREED:

          SECTION 1. Definitions and Accounting Terms.

          1.01. Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

          “2012 Convertible Senior Notes” shall mean Holdings’ 6% Convertible Senior Notes due 2012 issued pursuant to the 2012 Convertible Senior Notes Indenture, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2012 Convertible Senior Notes Indenture” shall mean the indenture pursuant to which the 2012 Convertible Senior Notes were issued, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2014 Convertible Senior Notes” shall mean the Endeavour Energy Luxembourg S.àr.l.’s 11.5% Guaranteed Convertible Senior Bonds due 2014 issued pursuant to the 2014 Convertible Senior Notes Trust Deed, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2014 Convertible Senior Notes Trust Deed” shall mean the trust deed pursuant to which the 2014 Convertible Senior Notes were issued, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2014 Senior Subordinated Notes” shall mean Holdings’ 12% Senior Subordinated Notes due 2014 issued pursuant to the 2014 Senior Subordinated Notes Agreement, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2014 Senior Subordinated Notes Agreement” shall mean the note agreement pursuant to which the 2014 Senior Subordinated Notes were issued, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

          “2P Reserve Value” shall mean, as of any date determination with respect to Proved Reserves and Probable Reserves, in each case of Holdings and its Subsidiaries, the sum of (a) the PV-10

Value of such Proved Reserves as of such date plus (b) the Probable Reserve Value of such Probable Reserves as of such date.

          “2P Reserves” shall mean the sum of Proved Reserves and Probable Reserves.

          “Acquired Entity or Business” shall mean either (a) the assets constituting a business, division or product line of any Person not already a Subsidiary of Holdings or (b) 100% of the Equity Interests of any such Person, which Person shall, as a result of the acquisition of such Equity Interests, become a Wholly-Owned Subsidiary Guarantor (or shall be merged with and into the Borrower or a Wholly-Owned Subsidiary Guarantor, with the Borrower or the Wholly-Owned Subsidiary Guarantor being the surviving or continuing Person).

          “Additional Lender” shall have the meaning provided in Section 2.10(a).

          “Additional Security Documents” shall have the meaning provided in Section 7.12(a).

          “Adjusted Consolidated Net Income” shall mean, for any period, Consolidated Net Income for such period plus the sum of the amount of all net non-cash charges (including, without limitation, depletion, depreciation, amortization, deferred tax expense and non-cash interest expense and net non-cash losses which were included in arriving at Consolidated Net Income for such period), less the amount of all net non-cash gains and non-cash credits which were included in arriving at Consolidated Net Income for such period.

          “Adjusted Consolidated Working Capital” shall mean, at any time, Consolidated Current Assets (but excluding therefrom all cash and Cash Equivalents) less Consolidated Current Liabilities at such time.

          “Administrative Agent” shall mean Cyan Partners, LP (or its designee), in its capacity as Administrative Agent for the Lenders hereunder and under the other Credit Documents, and shall include any successor to the Administrative Agent appointed pursuant to Section 10.09.

          “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (a) to vote 10% or more of the securities having ordinary voting power for the election of directors (or equivalent governing body) of such Person or (b) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided, however, that none of the Administrative Agent, any Lender or any of their respective Affiliates shall be considered an Affiliate of Holdings or any Subsidiary thereof.

          “Agents” shall mean and include the Administrative Agent and the Collateral Agent.

          “Aggregate Consideration” shall mean, with respect to any Permitted Acquisition, the sum (without duplication) of (a) the Fair Market Value of Holdings Common Stock issued (or to be issued) as consideration in connection with such Permitted Acquisition (including, without limitation, Holdings Common Stock which may be required to be issued as earn-out consideration upon the achievement of certain future performance goals of the respective Acquired Entity or Business (as determined in good faith by the senior management of Holdings)), (b) the aggregate amount of all cash paid (or to be paid) by Holdings or any of its Subsidiaries in connection with such Permitted Acquisition (including, without limitation, payments of fees and costs and expenses in connection therewith) and all contingent cash purchase price, earn-out, non-compete and other similar obligations of Holdings or any of

its Subsidiaries incurred and reasonably expected to be incurred in connection therewith (as determined in good faith by Holdings), (c) the aggregate principal amount of all Indebtedness assumed, incurred, refinanced and/or issued in connection with such Permitted Acquisition, (d) the aggregate liquidation preference of all Qualified Preferred Stock of Holdings issued or to be issued as consideration in connection with such proposed Permitted Acquisition (including, without limitation, Qualified Preferred Stock of Holdings which may be required to be issued as earn-out consideration upon the achievement of certain future performance goals of the respective Acquired Entity or Business (as determined in good faith by Holdings)) and (e) the Fair Market Value of all other consideration paid (or to be paid) in connection with such Permitted Acquisition.

          “Agreement” shall mean this Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended or renewed from time to time.

          “Approved Stock Exchange” shall have the meaning provided in Section 7.21(a).

          “Approved Third Party Credit Provider” shall mean, with respect to any Hedging Agreement or Third Party Letter of Credit, a Person that, at the time such Hedging Agreement is entered into or such Third Party Letter of Credit is issued, as the case may be, is (a) the Administrative Agent or any Lender or any Affiliate of the Administrative Agent or a Lender, (b) any Person whose senior unsecured long-term debt is rated as Investment Grade or (c) any other Person that is reasonably acceptable to the Administrative Agent.

          “Asset Sale” shall mean any direct or indirect sale, transfer, issuance, conveyance, lease (other than operating leases entered into in the ordinary course of business), assignment or other disposition by Holdings or any of its Subsidiaries to any Person (including by way of redemption by such Person) other than to Holdings or a Wholly-Owned Subsidiary Guarantor of any property or asset (including, without limitation, any capital stock or other securities of, or Equity Interests in, another Person), but excluding sales of assets pursuant to Sections 8.02(b), (c), (d), (i), (j), (k), (l), and (m).

          “Assignment and Assumption Agreement” shall mean an Assignment and Assumption Agreement substantially in the form of Exhibit I.

          “Attributable Indebtedness” in respect of a sale-leaseback transaction shall mean, as at the time of determination, the present value of the total obligations of the lessee for rental/lease payments during the remaining term of the lease included in such sale-leaseback transaction (including any period for which such lease has been extended); provided, however, that if such sale-leaseback transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of Capitalized Lease Obligations.

          “Authorization” shall mean an authorization, consent, permit, approval, resolution, license, exemption, filing, notarization or registration.

          “Authorized Officer” shall mean, with respect to (a) delivering the Notice of Borrowing and similar notices, any person or persons that has or have been authorized by the Board of Directors of Holdings or the Borrower to deliver such notices pursuant to this Agreement and that has or have appropriate signature cards on file with the Administrative Agent, (b) delivering financial information and officer’s certificates (including certificates described in Section 7.01(d)) pursuant to this Agreement, the chief financial officer, the treasurer or the principal accounting officer of Holdings or the Borrower, as applicable and (c) any other matter in connection with this Agreement or any other Credit Document, any officer (or a person or persons so designated by any two officers) of Holdings or the Borrower, as applicable.

          “Bankruptcy Code” shall have the meaning provided in Section 9.05.

          “Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

          “BNP Cash Collateral Account” shall mean that certain account in the name of BNP Paribas maintained with Barclays Bank, account number ▇▇▇▇▇ ▇▇▇▇▇ 0000084028H 31, into which cash has been deposited to cash collateralize letters of credit supporting obligations of Holdings and its Subsidiaries under the Hess Contracts.

          “Borrower” shall have the meaning provided in the first paragraph of this Agreement.

          “Borrowing” shall mean the borrowing of a Term Loan from all the Lenders on the Funding Date.

          “Business” shall mean any corporation, limited liability company, partnership or other business entity (or the adjectival form thereof, where appropriate) or the equivalent of the foregoing in any jurisdiction outside of the United States or any State thereof.

          “Business Day” shall mean for all purposes, any day except Saturday, Sunday and any day which shall be in New York, New York or London, England, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close.

          “Calculation Period” shall mean, with respect to any Material Permitted Acquisition, any Material Permitted Business Investment, any Material Asset Sale or any other event expressly requiring a calculation to be made on a Pro Forma Basis pursuant to the terms of this Agreement, the Test Period most recently ended prior to the date of such Material Permitted Acquisition, such Material Permitted Business Investment, such Material Asset Sale or other event for which financial statements have been delivered to the Lenders pursuant to this Agreement.

          “Capital Expenditures” shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with GAAP (excluding Permitted Acquisitions and Permitted Business Investments whether or not capitalized in accordance with GAAP) and, without duplication, the amount of all Capitalized Lease Obligations incurred by such Person.

          “Capitalized Lease Obligations” shall mean, with respect to any Person, all rental obligations of such Person which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

          “Cash Equivalents” shall mean, as to any Person, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition, (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or ▇▇▇▇▇’▇, (c) Dollar-denominated time deposits, certificates of deposit and bankers acceptances of any Lender or any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from ▇▇▇▇▇’▇ with maturities of not more than six months from the date of acquisition by such Person, (d) repurchase obligations with a term of not more than seven days for underlying securities of the types described in

clause (a) above entered into with any bank meeting the qualifications specified in clause (c) above, (e) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇’▇ and in each case maturing not more than six months after the date of acquisition by such Person, (f) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (e) above and (g) instruments equivalent to those referred to in clauses (a) through (f) above denominated in Pounds comparable in credit quality and tenor to those referred to above and customarily used by companies for cash management purposes in the United Kingdom to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

          “Cash Interest” shall have the meaning provided in Section 2.06(a).

          “Change in Law” shall have the meaning provided in Section 9.06.

          “Change of Control” shall mean (a) Holdings shall at any time cease to own (beneficially and of record), directly or indirectly, 100% of the Equity Interests of the Borrower, (b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 45% or more on a fully diluted basis of the economic or voting interests in Holdings’ capital stock, (c) Continuing Directors shall at any time cease to constitute a majority of the Board of Directors of Holdings or (d) a “change of control” or similar event the occurrence of which gives rise to a mandatory prepayment or redemption, required offer to purchase or an event of default shall occur as provided in any Permitted Junior Debt (or any documentation governing same) or any Qualified Preferred Stock (or the documentation governing the same).

          “Class C Convertible Preferred Stock” means Holdings’ Series C Preferred Stock with the terms set forth in the Certificate of Designation of Series C Preferred Stock originally filed with the Nevada Secretary of State on October 30, 2006.

          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor statute and any regulations promulgated thereunder.

          “Collateral” shall mean all property (whether real or personal, tangible or intangible) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Collateral under and as defined in each Security Document.

          “Collateral Agent” shall mean Cyan Partners, LP (or its designee), in its capacity as Collateral Agent for the Lenders hereunder and under the other Credit Documents, and shall include any successor to the Collateral Agent appointed pursuant to Section 10.09.

          “Collective Bargaining Agreements” shall have the meaning provided in Section 5.05(e).

          “Commitment” shall mean, for each Lender, the commitment of such Lender to make a Term Loan, in such amount as set forth opposite such Lender’s name in Schedule 1.01(a) hereto directly below the column entitled “Term Loan Commitment”, as the same may be (i) terminated pursuant to Section 3.03 or Section 9 or (ii) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.08 or 11.04(b).

          “Commodity Hedging Agreement” shall mean a commodity price risk management agreement or similar arrangement (including commodity price swap agreements, forward agreements or

contracts of sale which provide for prepayment for deferred shipment or delivery of oil, gas or other commodities).

          “Consolidated Current Assets” shall mean, at any time, the consolidated current assets (without giving any effect to any movement in the ▇▇▇▇-to-market valuation under Hedging Agreements) of Holdings and its Subsidiaries at such time.

          “Consolidated Current Liabilities” shall mean, at any time, the consolidated current liabilities (without giving effect to any movement in the ▇▇▇▇-to-market valuation under Hedging Agreements) of Holdings and its Subsidiaries at such time, but excluding the current portion of any Indebtedness under this Agreement and the current portion of any other long-term Indebtedness which would otherwise be included therein.

          “Consolidated EBITDAX” shall mean, for any period, Consolidated Net Income for such period (without giving effect to (a) any extraordinary gain or losses, (b) any non-cash income or non-cash expenses; provided that any such non-cash expenses that are excluded from the calculation of Consolidated EBITDAX in any period pursuant to this clause (b) that later become cash expenses in a subsequent period shall reduce Consolidated EBITDAX in an amount equal to such cash expense, (c) any gains or losses from sales of assets other than inventory and Hydrocarbons sold in the ordinary course of business and (d) interest income) adjusted by adding thereto (in each case to the extent deducted in determining Consolidated Net Income for such period), without duplication, the amount of (i) total interest expense (inclusive of amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees) of Holdings and its Subsidiaries determined on a consolidated basis for such period, (ii) provision for taxes based on income and foreign withholding taxes for Holdings and its Subsidiaries determined on a consolidated basis for such period, (iii) all depletion, depreciation and amortization expense of Holdings and its Subsidiaries determined on a consolidated basis for such period, (iv) in the case of any period including the fiscal quarters of Holdings ended or ending June 30, 2010 or September 30, 2010, the amount of all fees and expenses incurred by Holdings and its Subsidiaries in connection with the entering into of this Agreement and the other Credit Documents during either such fiscal quarter, (v) geological and geophysical expense for such period, (vi) all amounts attributable to impairment of oil and gas properties for such period, and (vii) consolidated amortization expense or impairment charges of Holdings and its Subsidiaries recorded in connection with the application of Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangibles.” For the avoidance of doubt, it is understood and agreed that, to the extent any amounts are excluded from Consolidated Net Income by virtue of the proviso to the definition thereof contained herein, any add backs to Consolidated Net Income in determining Consolidated EBITDAX as provided above shall be limited (or denied) in a fashion consistent with the proviso to the definition of Consolidated Net Income contained herein. Notwithstanding anything to the contrary contained above, for purposes of determining Consolidated EBITDAX for Holdings’ fiscal quarters ended December 31, 2009 and March 31, 2010, Consolidated EBITDAX shall be calculated in accordance with the definition of Test Period contained herein.

          “Consolidated Indebtedness” shall mean, at any time, the sum of (without duplication) (a) all Indebtedness of Holdings and its Subsidiaries (on a consolidated basis) as would be required to be reflected as debt or Capitalized Lease Obligations on the liability side of a consolidated balance sheet of Holdings and its Subsidiaries in accordance with GAAP, (b) all Indebtedness of Holdings or any of its Subsidiaries of the type described in clauses (b), (g) and (h) of the definition of Indebtedness, and (c) all Contingent Obligations of Holdings or any of its Subsidiaries in respect of Indebtedness of any third Person of the type referred to in preceding clauses (a) and (b); provided that the amount of any Indebtedness in respect of Hedging Agreements shall be at any time the unrealized net loss position (taking into account all Hedging Agreements), if any, of Holdings and/or its Subsidiaries thereunder on a

marked-to-market basis determined as of the most recently ended fiscal quarter; provided further, that if at any time when Consolidated Indebtedness is being determined, the net position across all Holdings’ and its Subsidiaries Hedging Agreements is positive, Consolidated Indebtedness shall, other than for the purposes of calculations of Total Leverage Ratio, be reduced by such positive amount.

          “Consolidated Net Income” shall mean for any period, the net income (or loss) of Holdings and its Subsidiaries determined on a consolidated basis for such period (taken as a single accounting period) in accordance with GAAP, provided that the following items shall be excluded in computing Consolidated Net Income (without duplication): (i) the net income (or loss) of any Person in which a Person or Persons other than Holdings and its Wholly-Owned Subsidiaries has an Equity Interest or Equity Interests to the extent of such Equity Interests held by Persons other than Holdings and its Wholly-Owned Subsidiaries in such Person, (ii) except for determinations expressly required to be made on a Pro Forma Basis, the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or all or substantially all of the property or assets of such Person are acquired by a Subsidiary and (iii) the net income of any Subsidiary to the extent that the declaration or payment of cash dividends or similar cash distributions by such Subsidiary of such net income is not at the time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary.

          “Consolidated Net Indebtedness” shall mean, at any time, the difference of (a) Consolidated Indebtedness at such time less (b) the average daily amount of Holdings’ and its Subsidiaries’ Unrestricted cash and Unrestricted Cash Equivalents during the thirty day period ending on the respective date on which “Consolidated Net Indebtedness” is determined to the extent such cash and Cash Equivalents are (i) subject to control agreements pursuant to which the Administrative Agent has “control” with respect to such cash and Cash Equivalents within the meaning of Section 8-106 or 9-104 (as applicable) of the UCC or otherwise subject to a control or similar agreement of the type delivered pursuant to Section 5.09(g) or (ii) pledged to secure the repayment of outstanding Consolidated Indebtedness (other than the Obligations).

          “Consolidated Net Secured Indebtedness” shall mean, at any time, the difference of (a) Consolidated Indebtedness at such time that is secured by a Lien less (b) the average daily amount of Holdings’ and its Subsidiaries’ Unrestricted cash and Unrestricted Cash Equivalents during the thirty day period ending on the respective date on which “Consolidated Net Secured Indebtedness” is determined to the extent such cash and Cash Equivalents are (i) subject to control agreements pursuant to which the Administrative Agent has “control” with respect to such cash and Cash Equivalents within the meaning of Section 8-106 or 9-104 (as applicable) of the UCC or otherwise subject to a control or similar agreement of the type delivered pursuant to Section 5.09(g) or (ii) pledged to secure the repayment of outstanding Consolidated Indebtedness (other than the Obligations).

          “Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The

amount of any Contingent Obligation shall be deemed to be an amount equal to the lower of (i) the maximum amount of such Contingent Obligation pursuant to the agreement or instrument under which such Contingent Obligation is created and (ii) the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

          “Continuing Directors” shall mean the directors of Holdings on the Funding Date and each other director if such director’s nomination for election to the Board of Directors is recommended by a majority of the then Continuing Directors.

          “Credit Documents” shall mean this Agreement, each Note, the Subsidiaries Guaranty, each Security Document, the Syndication Letter (for the purposes of Sections 9.01, 9.03 and 11.01 only) and, after the execution and delivery thereof pursuant to the terms of this Agreement, each joinder, accession or similar agreement by which any Subsidiary of Holdings becomes party to the Subsidiaries Guaranty or any Security Document.

          “Credit Party” shall mean Holdings, the Borrower and each Subsidiary Guarantor.

          “Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

          “Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

          “Dividend” shall mean, with respect to any Person, that such Person has declared or paid a dividend, distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common Equity Interests of such Person) or cash to its stockholders, partners or members in their capacity as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or any other Equity Interests outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the capital stock or any other Equity Interests of such Person outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests). Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments (other than in the ordinary course of business, consistent with past practices) made or required to be made by such Person with respect to any stock appreciation rights, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

          “Dollars” and the sign “$” shall each mean freely transferable lawful money of the United States.

          “Dutch Pledge Agreement” shall have the meaning provided in Section 5.09(e).

          “Dutch Sector” shall mean the jurisdiction of The Netherlands commonly referred to as the Dutch Sector — North Sea.

          “Dutch Subsidiaries” shall mean and include each of Endeavour International Holding B.V. and Endeavour Energy Netherlands B.V.

          “Effective Date” shall have the meaning provided in Section 11.10.

          “Eligible Transferee” shall mean and include a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act), but in any event excluding any natural Person, Holdings, the Borrower and their respective Subsidiaries and Affiliates.

          “Employee Benefit Plans” shall have the meaning provided in Section 5.05(a).

          “Employment Agreements” shall have the meaning provided in Section 5.05(d).

          “English Charge Over Shares” shall have the meaning provided in Section 5.09(d).

          “English Debenture” shall have the meaning provided in Section 5.09(c).

          “English Security Documents” shall mean and include (i) each English Charge Over Shares and (ii) each English Debenture.

          “Environmental Law” shall mean any applicable Federal, state, local, UK or other non-U.S. law (including common law), rule, regulation, ordinance, code, directive, judgment or order now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, relating to the protection of the environment or of human health and safety (to the extent such health and safety relate to exposure to Hazardous Materials), or to the presence, Release or threatened Release, or the manufacture, use, transportation, treatment, storage, disposal or recycling of Hazardous Materials, or the arrangement for any such activities.

          “EOC” shall mean Endeavour Operating Corporation, a Delaware corporation.

          “Equity Interests” shall mean (i) with respect to any Person that is a corporation, any and all shares, interests, participation or other equivalents of or interest in (however designated and whether or not voting) corporate stock of such Person, including each class of common stock and preferred stock of such Person, (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person, and (iii) any warrants, rights or options to purchase any of the instruments or interests referred to in the preceding clauses (i) or (ii).

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.

          “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which together with Holdings and/or any of its Subsidiaries would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

          “ERISA Event” shall mean (a) a Reportable Event; (b) the failure of any Plan to satisfy the minimum funding standards, if any, applicable to that Plan for a Plan year under Section 412 of the Code or Section 302 of ERISA or a Plan’s application for a waiver of such minimum funding standards pursuant to Section 412(c) of the Code or Section 302(c) of ERISA; (c) the arising of a lien or encumbrance under Section 4068 of ERISA; (d) a determination that any Plan is, or is expected to be, in at-risk status under Section 430(i) of the Code or Section 303(i) of ERISA; (e) the incurrence by Holdings, any of its Subsidiaries, or an ERISA affiliate of material liability (including any indirect, contingent, or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 4062, 4063, 4064, or 4069 of ERISA or Section 4971 or 4975 of the Code; (f) the institution of proceedings, or the occurrence of an event or condition which would reasonably be expected to constitute grounds for the

institution of proceedings by the PBGC to terminate or appoint a trustee to administer any Plan pursuant to Title IV of ERISA; (g) the filing of a notice of intent to terminate any Plan, if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or the termination of any Plan under Section 4041(c) of ERISA; (h) the complete or partial withdrawal of Holdings, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan that gives rise to, or is expected to give rise to a liability under Section 4201 of ERISA, the reorganization or insolvency under Title IV of ERISA of any Multiemployer Plan, or the receipt by Holdings, any Subsidiary or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Holdings, any Subsidiary or any ERISA Affiliate of any notice, that a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; or (i) the knowledge of Holdings of a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary (as defined in Section 3(21) of ERISA) or disqualified person (as defined in Section 4975(e)(2) of the Code) with respect to any Plan for which Holdings or any of its Subsidiaries is reasonably expected to incur a material liability.

          “Event of Default” shall have the meaning provided in Section 9.

          “Excess Cash Flow” shall mean, for any period, the remainder of (a) the sum of, without duplication, (i) Adjusted Consolidated Net Income for such period and (ii) the decrease, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period, minus (b) the sum of, without duplication, (i) the aggregate amount of all Capital Expenditures made by Holdings and its Subsidiaries during such period (other than Capital Expenditures to the extent financed with asset sale proceeds, insurance proceeds or proceeds from sales or issuances of Equity Interests or Indebtedness), (ii) the aggregate amount of permanent principal payments of Indebtedness for borrowed money of Holdings and its Subsidiaries and the permanent repayment of the principal component of Capitalized Lease Obligations of Holdings and its Subsidiaries during such period (other than (1) repayments made pursuant to the Refinancing, (2) repayments made with the proceeds of asset sales, insurance proceeds or proceeds from sales or issuances of Equity Interests or Indebtedness and (3) payments of Term Loans and/or other Obligations, provided that repayments of Term Loans shall be deducted in determining Excess Cash Flow to the extent such repayments were (x) required as a result of a Scheduled Repayment pursuant to Section 4.02(a) or (y) made as a voluntary prepayment pursuant to Section 4.01 with internally generated funds), (iii) the increase, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period, (iv) the Aggregate Consideration paid in cash by Holdings or any of its Subsidiaries in respect of all Permitted Acquisitions and Permitted Business Investments during such period (other than Permitted Acquisitions and Permitted Business Investments to the extent financed with asset sale proceeds, insurance proceeds or proceeds from sales or issuances of Equity Interests or Indebtedness), (v) the aggregate amount of Dividends paid by Holdings during such period on Class C Convertible Preferred Stock in accordance with Section 8.03(f), (vi) the aggregate amount of any non-cash charges incurred in a prior period which are paid in cash in such period, and (vii) the aggregate amount of any cash gains on Material Asset Sales during such period.

          “Excess Cash Payment Date” shall mean the date occurring 90 days after the last day of each fiscal year of Holdings (commencing with the fiscal year of Holdings ending December 31, 2011).

          “Excess Cash Payment Period” shall mean the immediately preceding fiscal year of Holdings.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

          “Exchange Rate” shall mean, on any day, with respect to any currency other than Dollars, the noon buying rate in New York City for such currency on such date for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York.

          “Existing Credit Agreements” shall mean (i) that certain $225,000,000 Secured Revolving Loan and Letter of Credit Facility Agreement, dated October 30, 2006, among Holdings, BNP Paribas as Mandated Lead Arranger, Agent, Security Trustee and Fronting Bank (as each such term is defined therein), The Governor and Company of the Bank of Scotland, as Mandated Lead Arranger, Account Bank and Technical Bank (as each such term is defined therein) and the other lenders thereto (as amended through and including the Funding Date) and (ii) that certain $25,000,000 Junior Facility Agreement, dated January 22, 2008, among Holdings, Bank of Scotland Plc as Mandated Lead Arranger, Technical Bank, Original Lender and Agent (as each such term is defined therein) and BNP Paribas as Security Trustee (as amended through and including the Funding Date).

          “Existing Indebtedness” shall have the meaning provided in Section 5.06(c).

          “Existing Indebtedness Agreements” shall have the meaning provided in Section 5.05(h).

          “Fair Market Value” shall mean, with respect to any asset (including any Equity Interests of any Person), the price at which a willing buyer, not an Affiliate of the seller, and a willing seller who does not have to sell, would agree to purchase and sell such asset, as determined in good faith by the Board of Directors of Holdings or other governing body or, pursuant to a specific delegation of authority by such Board of Directors or governing body, a designated senior executive officer, of Holdings, or the Subsidiary of Holdings selling such asset.

          “Federal Funds Rate” shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

          “Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01.

          “Funding Date” shall mean the date occurring on or after the Effective Date on which the incurrence of Term Loans occurs.

          “GAAP” shall mean generally accepted accounting principles in the United States as in effect from time to time; provided that determinations in accordance with GAAP for purposes of Section 8, including defined terms as used therein, are subject (to the extent provided therein) to Section 11.07(a).

          “Governmental Authority” shall mean the government of the United Kingdom, the United States, the European Union and any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

          “Guaranteed Creditors” shall mean and include each of the Administrative Agent, the Collateral Agent, the Lenders and each Approved Third Party Credit Provider to the extent such party constitutes a Secured Creditor under the Security Documents.

          “Guaranteed Obligations” shall mean (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of the principal and interest on each Note issued by, and all Terms Loans made to, the Borrower under this Agreement and all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), indebtedness and liabilities (including, without limitation, indemnities, fees and interest (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for herein, whether or not such interest is an allowed claim in any such proceeding) thereon) of the Borrower to the Lenders, the Administrative Agent and the Collateral Agent now existing or hereafter incurred under, arising out of or in connection with this Agreement and each other Credit Document to which the Borrower is a party and the due performance and compliance by the Borrower with all the terms, conditions and agreements contained in the Credit Agreement and in each such other Credit Document and (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for herein, whether or not such interest is an allowed claim in any such proceeding) of the Borrower or any Guarantor owing under any Hedging Agreement or reimbursement agreement related to any Third Party Letter of Credit in each case entered into with, or issued or provided by, an Approved Third Party Credit Provider to the extent such Approved Third Party Credit Provider is a party to the Intercreditor Agreement, whether now in existence or hereafter arising, and the due performance and compliance with all terms, conditions and agreements contained therein.

          “Guarantor” shall mean each of Holdings and each Subsidiary Guarantor.

          “Guaranty” shall mean each of the Holdings Guaranty and the Subsidiaries Guaranty.

          “Hazardous Materials” shall mean any waste or other substance that is listed, defined, designated or classified as, or otherwise regulated as, hazardous or toxic or a pollutant or contaminant under or pursuant to any Environmental Law, including any petroleum, Hydrocarbons and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

          “Hedging Agreement” shall mean any Commodity Hedging Agreement, Interest Rate Hedging Agreement or foreign currency exchange agreement or other currency exchange rate hedging agreement.

          “Hess Contracts” shall mean three Abandonment and Security Agreements between ▇▇▇▇ Limited and the Borrower relating to the IVRR/▇▇▇ ▇▇▇/Hamish, ▇▇▇▇▇ Area A and ▇▇▇▇▇ Area A assets each dated October 26, 2006.

          “Holdings” shall have the meaning provided in the first paragraph of this Agreement.

          “Holdings Common Stock” shall have the meaning provided in Section 6.13.

          “Holdings Guaranty” shall mean the guaranty of Holdings pursuant to Section 12.

          “Hydrocarbon Interests” shall mean all rights, titles, interests and estates now owned or hereafter acquired in and to oil and gas leases, leasehold interests and licenses, oil, gas and mineral leases, leasehold interests and licenses, or other liquid or gaseous hydrocarbon licenses, leases, fee mineral interests, term mineral interests, subleases, farm-outs, royalties, overriding royalty and royalty interests, non-consent interests arising out of or pursuant to Oil and Gas Contracts, net profit interests, net revenue interests, oil payments, production payments, production payment interests and similar interests and

estates, including all reserved or residual interest of whatever nature and all reversionary or carried interests relating to any of the foregoing.

          “Hydrocarbons” shall mean oil, gas, casinghead gas, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons, all products directly or indirectly refined, separated, settled and dehydrated therefrom, including kerosene, liquefied petroleum gas, refined lubricating oils, diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.

          “Immaterial Subsidiary” shall mean any Subsidiary that did not, as of the last day of the most recently ended Test Period, have assets with a book value in excess of 2.5% of the consolidated total assets of Holdings and its Subsidiaries; provided that if at any time the aggregate amount of consolidated total assets attributable to Immaterial Subsidiaries would otherwise exceed 5% of the consolidated total assets of Holdings and it Subsidiaries, then Subsidiaries that would otherwise constitute Immaterial Subsidiaries pursuant to this definition (without giving effect to this proviso) shall be deemed not to constitute Immaterial Subsidiaries to the extent necessary so that the percentage limitation in this proviso is not exceeded. For purposes of calculations of the book value of assets of a Subsidiary pursuant to this definition, (i) the value of the loan evidenced by that certain revolving loan facility agreement dated January 23, 2008 (as amended, supplemented or modified from time to time) between Endeavour International Holding B.V. and Endeavour Energy Luxembourg S.a.r.l., (ii) during the period from the Funding Date until January 1, 2011, the value of the intercompany loan in the amount of $23,500,000 between Endeavour North Sea Limited and Endeavour Energy UK Limited, and (iii) the value of other loans and receivables in an aggregate amount not in excess of $5,000,000 owed to such Subsidiary by Holdings or any other Subsidiary of Holdings, in each case shall be disregarded.

          “Incremental Amendment” shall have the meaning provided in Section 2.10(a).

          “Incremental Term Loans” shall have the meaning provided in Section 2.10(a).

          “Indebtedness” shall mean, as to any Person, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) the maximum amount available to be drawn or paid under all letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations issued for the account of such Person and all unpaid drawings and unreimbursed payments in respect of such letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations, (c) all indebtedness of the types described in clause (a), (b), (d), (e), (f), (g), (h) or (i) of this definition secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the Fair Market Value of the property to which such Lien relates), (d) all Capitalized Lease Obligations of such Person, (e) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations, (f) all Contingent Obligations of such Person (other than Contingent Obligations of a Credit Party in respect of contractual obligations of another Credit Party arising in the ordinary course of business and not otherwise constituting Indebtedness), (g) all obligations under any Hedging Agreement, (h) all Off-Balance Sheet Liabilities of such Person and (i) all Attributable Indebtedness of such Person. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is directly liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing, Indebtedness shall not include trade payables, accrued expenses and deferred tax and other credits incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person.

          “Indemnified Person” shall have the meaning provided in Section 11.01.

          “Independent Engineering Firm” shall mean Netherland, ▇▇▇▇▇▇ & Associates, Inc. and/or one or more independent engineering firms selected by the Borrower and reasonably acceptable to the Administrative Agent.

          “Intercompany Loans” shall have the meaning provided in Section 8.05(h).

          “Intercompany Note” shall mean a promissory note evidencing Intercompany Loans, duly executed and delivered substantially in the form of Exhibit J (or such other form as shall be satisfactory to the Administrative Agent in its sole discretion).

          “Intercreditor Agreement” shall mean an intercreditor agreement, duly executed and delivered by the Administrative Agent, the Collateral Agent and one or more Approved Third Party Credit Providers, in form and substance satisfactory to the Administrative Agent in its sole discretion and providing, inter alia, (i) that after application to all reasonable costs and expenses incurred by the Collateral Agent in connection with the Intercreditor Agreement and enforcement or otherwise under any Security Document, the first $25,000,000 of proceeds from the enforcement of Collateral shall be applied to discharge obligations owed under Hedging Agreements with Approved Third Party Credit Providers that have entered into the Intercreditor Agreement and reimbursement agreements with respect to Third Party Letters of Credit issued by Approved Third Party Credit Providers that have entered into the Intercreditor Agreement, and (ii) until all Obligations have been satisfied in full, the Collateral Agent (acting on the instructions of the Required Lenders) will have the sole power to exercise remedies against the Collateral and to foreclose upon and dispose of Collateral.

          “Interest Payment Date” shall mean the last Business Day of each December, March, June and September occurring after the Funding Date, commencing with December 31, 2010.

          “Interest Rate Hedging Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement or other interest rate protection agreement, interest rate hedging arrangement or other similar arrangement or arrangement.

          “Investment Grade” shall mean a rating of BBB- or higher (with a stable outlook) by S&P and Baa3 or higher (with a stable outlook) by Moody’s.

          “Investments” shall have the meaning provided in Section 8.05.

          “Junior Financing” shall mean each of (a) the 2012 Convertible Senior Notes, (b) the 2014 Convertible Senior Notes, (c) the 2014 Senior Subordinated Notes and (d) Permitted Junior Debt.

          “Junior Lien Obligations” shall mean Permitted Junior Debt that is intended to have a Lien on the Collateral that ranks junior to the Lien of the Secured Creditors securing the Obligations.

          “Lead Arranger” shall mean Cyan Partners, LP, in its capacity as Sole Lead Arranger and Sole Book Runner, and any successor thereto.

          “Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee, sublessee or licensee in, to and under leases, subleases or licenses of land, improvements and/or fixtures.

          “Lender” shall mean each financial institution listed on Schedule 1.01(a) hereto, as well as any Person that becomes a “Lender” hereunder pursuant to Section 2.08 or 11.04(b).

          “Lender Default” shall mean (a) the wrongful refusal or the failure of a Lender to make available its portion of the Borrowing made on the Funding Date or (b) a Lender having notified in writing the Borrower and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 2.01 or Section 2.03.

          “Lien” shall mean any mortgage, pledge, hypothecation, assignment for security, deposit arrangement, encumbrance (other than any ordinary course encumbrance not securing any obligations of any Person), lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

          “Management Agreements” shall have the meaning provided in Section 5.05(c).

          “Margin Stock” shall have the meaning provided in Regulation U.

          “Material Adverse Effect” shall mean (a) a material adverse effect on the business, property or financial condition of Holdings and its Subsidiaries taken as a whole or (b) a material adverse effect (i) on the rights or remedies of the Lenders, the Administrative Agent or the Collateral Agent hereunder or under any other Credit Document, (ii) on the ability of any Credit Party to perform its obligations to the Lenders, the Administrative Agent or the Collateral Agent hereunder or under any other Credit Document or (iii) on a material portion of the Collateral.

          “Material Asset Sale” shall mean any Asset Sale or series of related Assets Sales (i.e., separate assets being sold, transferred or otherwise disposed of as part of an identifiable group of assets and within a reasonably limited time period) where the aggregate consideration therefor is equal to, or in excess of, $5,000,000 and shall, subject to the aforementioned dollar limitation, include any such Asset Sale or Asset Sales of any Subsidiary or any Oil and Gas Properties.

          “Material Permitted Acquisition” shall mean any Permitted Acquisition where the Consolidated EBITDAX attributable to the Acquired Entity or Business (as determined on a basis consistent with the definition of Consolidated EBITDAX with any necessary reference changes) for the Test Period most recently ended prior to the date of such Permitted Acquisition for which financial statements have been delivered to the Lenders pursuant to this Agreement exceeds 5% of Consolidated EBITDAX (calculated without giving effect to such Permitted Acquisition) for such Test Period.

          “Material Permitted Business Investment” shall mean any Permitted Business Investment where the Consolidated EBITDAX attributable to the assets acquired pursuant to such Permitted Business Investment (as determined on a basis consistent with the definition of Consolidated EBITDAX with any necessary reference changes) for the Test Period most recently ended prior to the date of such Permitted Business Investment for which financial statements have been delivered to the Lenders pursuant to this Agreement exceeds 5% of Consolidated EBITDAX (calculated without giving effect to such Permitted Business Investment) for such Test Period.

          “Maturity Date” shall mean August 16, 2013; provided that, if on October 14, 2011 there remains outstanding 2012 Convertible Senior Notes and 2014 Convertible Senior Notes in an aggregate principal amount in excess of $13,399,500, then the Maturity Date shall instead be October 14, 2011; provided, further, (a) the 2014 Convertible Senior Notes shall be deemed not to be outstanding for the purposes of this definition in the event that the 2014 Convertible Senior Notes Trust Deed has been amended or modified (including by means of a waiver) such that after giving effect thereto the holders of the 2014 Convertible Senior Notes do not have any so-called “put” or similar rights with respect to the 2014 Convertible Senior Notes that may be exercised at any time prior to November 16, 2013, and (b) the

2012 Convertible Senior Notes shall not be deemed to be outstanding pursuant to this definition in the event that the 2012 Convertible Senior Notes Indenture has been amended or modified (including by means of a waiver) to extend the maturity date of the 2012 Convertible Senior Notes to a date no earlier than November 16, 2013.

          “Moody’s” shall mean ▇▇▇▇▇’▇ Investors Service, Inc.

          “Mortgage” shall mean a mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, deed to secure debt, leasehold deed to secure debt, debenture or similar security instrument.

          “Mortgaged Property” shall mean any U.S. Oil and Gas Property or other Real Property owned or leased by Holdings or any of its Subsidiaries which is encumbered (or required to be encumbered) by a Mortgage pursuant to the terms of this Agreement or any Additional Security Document.

          “Multiemployer Plan” shall mean any multiemployer plan as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is an obligation to contribute of) Holdings, any of its Subsidiaries and/or any ERISA Affiliate, and each such plan for the five-year period immediately following the latest date on which Holdings, any of its Subsidiaries and/or an ERISA Affiliate contributed to or had an obligation to contribute to such plan.

          “NAIC” shall mean the National Association of Insurance Commissioners.

          “Net Cash Proceeds” shall mean, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such event, net of reasonable transaction costs (including, as applicable, any underwriting, brokerage or other customary commissions and reasonable legal, advisory and other fees and expenses associated therewith) received from any such event.

          “Net Insurance Proceeds” shall mean, with respect to any Recovery Event, the cash proceeds received by the respective Person in connection with such Recovery Event (net of (a) reasonable costs and taxes incurred in connection with such Recovery Event and (b) required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets the subject of such Recovery Event).

          “Net Sale Proceeds” shall mean for any sale or other disposition of assets, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such sale or other disposition of assets, net of (a) reasonable transaction costs (including, without limitation, any underwriting, brokerage or other customary selling commissions, reasonable legal, advisory and other fees and expenses (including title and recording expenses), associated therewith and sales, VAT and transfer taxes arising therefrom), (b) payments of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale or other disposition, (c) the amount of such gross cash proceeds required to be used to permanently repay any Indebtedness (other than Indebtedness secured pursuant to the Security Documents), which is secured by the respective assets which were sold or otherwise disposed of, and (d) the estimated net marginal increase in income, franchise or similar taxes which will be payable by Holdings’ consolidated group or any Subsidiary of Holdings with respect to the tax year of Holdings in which the sale or other disposition occurs as a result of such sale or other disposition (or, without duplication, which will be payable by Holdings’ consolidated group or any Subsidiary of Holdings in the tax year of Holdings in which cash proceeds in respect of such sale or other disposition are received by way of deferred payment pursuant to a promissory note, receivable or otherwise); provided, however, that such gross proceeds shall not include any portion of such gross cash

proceeds which Holdings determines in good faith should be reserved for post-closing adjustments (to the extent Holdings delivers to the Lenders a certificate signed by an Authorized Officer as to such determination), it being understood and agreed that on the day that all such post-closing adjustments have been determined (which shall not be later than six months following the date of the respective asset sale), the amount (if any) by which the reserved amount in respect of such sale or disposition exceeds the actual post-closing adjustments payable by Holdings or any of its Subsidiaries shall constitute Net Sale Proceeds on such date received by Holdings and/or any of its Subsidiaries from such sale or other disposition.

          “Non-Compete Agreements” shall have the meaning provided in Section 5.05(g).

          “Non-Defaulting Lender” shall mean and include each Lender, other than a Defaulting Lender.

          “Non-Guarantor Subsidiary” shall mean each Subsidiary of Holdings (other than the Borrower) that is not a Subsidiary Guarantor.

          “Non-U.S. Pension Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States by Holdings or any one or more of its Subsidiaries primarily for the benefit of employees of Holdings or such Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

          “Non-U.S. Subsidiary” shall mean, as to any Person, any Subsidiary of such Person that is not a U.S. Subsidiary of such Person.

          “Non-Wholly-Owned Subsidiary” shall mean, as to any Person, each Subsidiary of such Person which is not a Wholly-Owned Subsidiary of such Person.

          “North Sea” shall mean, collectively, the Dutch Sector, the UK Sector and surrounding areas of the North Sea, including, without limitation, any such areas in Scottish or Norwegian waters.

          “Note” shall have the meaning provided in Section 2.04(a).

          “Notice of Borrowing” shall have the meaning provided in Section 2.02(a).

          “Notice Office” shall mean, for credit and operational notices, the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ Attention: Divya Gopal, Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

          “Obligations” shall mean all amounts owing to the Administrative Agent, the Collateral Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document, including, without limitation, all amounts in respect of any principal, interest (including (a) any PIK Interest and (b) any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in this Agreement or the respective other Credit Document, whether or not such interest is an allowed claim under any such proceeding or under applicable state, federal or foreign law), penalties, fees, expenses, indemnifications, reimbursements, damages and other liabilities, and guarantees of the foregoing amounts.

          “Off-Balance Sheet Liabilities” of any Person shall mean (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any liability

of such Person under any sale and leaseback transactions that does not create a liability on the balance sheet of such Person, (c) any obligation under a Synthetic Lease or (d) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person.

          “Oil and Gas Business” shall mean (a) the acquisition, exploration, exploitation, development, operation and disposition of interests in Oil and Gas Properties and Hydrocarbons; (b) the gathering, treating, refining, processing, storage, marketing, distribution, selling and transporting of any production from such interests or properties; and (c) any business directly relating to or arising directly from exploration for, or development, production, treatment, processing, storage or selling of, Hydrocarbons, or that is or necessary or desirable to facilitate the activities described in this definition.

          “Oil and Gas Contracts” shall mean all contracts, agreements, operating agreements, farm-out or farm-in agreements, sharing agreements, mineral purchase agreements, contracts for the purchase, exchange, transportation, processing or sale of Hydrocarbons, rights-of-way, easements, surface leases, subleases, equipment leases, permits, franchises, licenses, pooling or unitization agreements, and unit or pooling designations and orders now or hereafter affecting any of the Oil and Gas Properties (or related oil and gas gathering assets) or Hydrocarbon Interests of Holdings and each of its Subsidiaries, or which are useful or appropriate in drilling for, producing, treating, handling, storing, transporting, or marketing oil, gas or other minerals produced from any of the Oil and Gas Properties of Holdings and each of its Subsidiaries, as any such contracts and agreements as they may be amended, restated, modified, substituted or supplemented from time to time.

          “Oil and Gas Properties” shall mean (a) Hydrocarbon Interests; (b) the properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all currently existing or future rights arising under (i) unitization agreements, orders or other arrangements, (ii) pooling orders, agreements or other arrangements and (iii) declarations of pooled units and the units created thereby (including all units created under orders, regulations and rules of any Governmental Authority having jurisdiction) which may affect all or any portion of the Hydrocarbon Interests; (d) all pipelines, gathering lines, compression facilities, tanks and processing plants; (e) all interests held in royalty trusts whether currently existing or hereafter created; (f) all Hydrocarbons in and under and which may be produced, saved, processed or attributable to the Hydrocarbon Interests, the lands covered thereby and all Hydrocarbons in pipelines, gathering lines, tanks and processing plants and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (g) all tenements, hereditaments, appurtenances, interests and properties in any way appertaining, belonging, affixed or incidental to the Hydrocarbon Interests, and all rights, titles, interests and estates described or referred to above (including (i) any and all Real Property, now owned or hereafter acquired, leased or subleased or otherwise used or held for use in connection with the operating, working or development of any such Hydrocarbon Interests or property and (ii) any and all surface leases, subleases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing); (h) all production units, drilling and spacing units (and the properties covered thereby) which may affect all or any portion of the other Oil and Gas Properties and any units created by agreement or designation or under orders, regulations, rules or other official acts of any Governmental Authority having jurisdiction; and (i) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests.

          “Outer Continental Shelf” shall have the meaning ascribed to such term in the Outer Continental Shelf Lands Act, 43 U.S.C. 1331, et seq.

          “Patriot Act” shall have the meaning provided in Section 11.17.

          “Payment Office” shall mean the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

          “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

          “PDP” shall mean Proved Developed Reserves that are categorized as producing in accordance with the petroleum reserves definitions promulgated by the Society of Petroleum Engineers (SPE) Inc. (or any generally recognized successor) as in effect at the time in question.

          “PDP Coverage Ratio” shall mean, on any date of determination, the ratio of (a) PV-10 Value (determined by substituting the phrase “from PDP production on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties” for the phrase “from Proved Reserves on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties” appearing in the second line of the definition thereof) on such date to (b) Consolidated Net Secured Indebtedness on such date.

          “Permitted Acquisition” shall mean the acquisition by a Qualified Credit Party of an Acquired Entity or Business; provided that (in each case) (a) the consideration paid or to be paid by the Qualified Credit Party consists solely of cash, Holdings Common Stock, Qualified Preferred Stock of Holdings, the issuance or incurrence of Indebtedness otherwise permitted by Section 8.04 and the assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 8.04, (b) in the case of the acquisition of 100% of the Equity Interests of any Acquired Entity or Business (including by way of merger), such Acquired Entity or Business shall own no Equity Interests of any other Person (either directly or indirectly) unless either (i) such Acquired Entity or Business owns 100% of the Equity Interests of such other Person or (ii) if such Acquired Entity or Business owns Equity Interests in any other Person which is a Non-Wholly-Owned Subsidiary of such Acquired Entity or Business, (A) such Acquired Entity or Business shall not have been created or established in contemplation of, or for purposes of, the respective Permitted Acquisition, (B) any such Non-Wholly-Owned Subsidiary of the Acquired Entity or Business shall have been a Non-Wholly-Owned Subsidiary of such Acquired Entity or Business prior to the date of the respective Permitted Acquisition and shall not have been created or established in contemplation thereof and (C) such Acquired Entity or Business and/or its Wholly-Owned Subsidiaries own at least 90% of the total value of all the assets owned by such Acquired Entity or Business and its Subsidiaries (for purposes of such determination, excluding the value of the Equity Interests of Non-Wholly-Owned Subsidiaries held by such Acquired Entity or Business and its Wholly-Owned Subsidiaries), (c) all of the business, division or product line acquired pursuant to the respective Permitted Acquisition, or the business of the Person acquired pursuant to the respective Permitted Acquisition and its Subsidiaries taken as a whole, is in the United States, the United Kingdom or the North Sea, (d) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 8.14 and (e) all requirements of Sections 7.17, 8.02 and 8.15 applicable to Permitted Acquisitions are satisfied. For the avoidance of doubt, a Permitted Business Investment shall not constitute a Permitted Acquisition.

          “Permitted Business Investments” shall mean investments of a nature that is or shall have become customary in, the Oil and Gas Business as a means of actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, storing, treating, selling or transporting oil and gas through agreements, transactions, interests or arrangements (including those that permit a person to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of Oil and Gas Business jointly with third parties), including the entry into or acquisition of operating agreements, working interests, licenses, royalty interests, mineral leases, processing agreements, farm-out and farm-in agreements, division

orders, contracts for the sale, transportation or exchange of oil or natural gas, unitization and pooling declarations and agreements and area of mutual interest agreements, production sharing agreements or other similar or customary agreements, transactions, properties, interests, and investments and expenditures in connection therewith (with the amount thereof measured at the time initially made); provided that neither Permitted Acquisitions nor other investments in Equity Interests of a Person shall constitute Permitted Business Investments.

          “Permitted Junior Debt” shall mean any Indebtedness of Holdings or any of its Subsidiaries in the form of unsecured or second lien loans or notes; provided that in any event, unless the Required Lenders otherwise expressly consent in writing prior to the issuance thereof:

     (a) except as provided in clause (f) below, no such Indebtedness shall be secured by any asset of Holdings or any of its Subsidiaries;

     (b) no such Indebtedness shall be guaranteed by any Person other than a Credit Party;

     (c) no such Indebtedness shall be subject to scheduled amortization or have a final maturity, in either case prior to the date occurring 91 days following the Maturity Date (for this purpose without regard to any proviso contained therein);

     (d) any “asset sale” mandatory prepayment provision or offer to prepay covenant included in the agreement, indenture or other instrument governing such Indebtedness shall provide that Holdings, the Borrower or the respective Subsidiary shall be permitted to repay Obligations under this Agreement before prepaying or offering to prepay such Indebtedness;

     (e) any “change of control” covenant included in the indenture governing any such Indebtedness that takes the form of notes issued pursuant to an indenture shall provide that, before the mailing of any required “notice of redemption” in connection therewith, Holdings shall covenant to (i) obtain the consent of the Required Lenders or (ii) pay the Obligations in full in cash;

     (f) in the case of any such Indebtedness that is secured (i) such Indebtedness is secured by only assets comprising Collateral (as defined in the Security Documents) on a second-lien basis relative to the Liens on such Collateral securing the Obligations of the Credit Parties, and not secured by any property or assets of Holdings or any of it Subsidiaries other than the Collateral (as defined in the Security Documents), (ii) such Indebtedness (and the Liens securing the same) are permitted by the terms of the Permitted Junior Debt Intercreditor Agreement (to the extent the Permitted Junior Debt Intercreditor Agreement is in effect), (iii) the security agreements relating to such Indebtedness are substantially the same as the Security Documents (with such differences as are reasonably satisfactory to the Collateral Agent) and (iv) a Permitted Junior Debt Representative acting on behalf of the holders of such Indebtedness shall have become party to a Permitted Junior Debt Intercreditor Agreement; provided that if such Indebtedness is the initial incurrence of Permitted Junior Debt by Holdings or any of its Subsidiaries that is secured by assets of Holdings or any of its Subsidiaries, then Holdings, the Borrower, its applicable Subsidiaries, the Administrative Agent, the Collateral Agent and the Permitted Junior Debt Representative for such Indebtedness shall have executed and delivered the Permitted Junior Debt Intercreditor Agreement;

     (g) the representations and warranties, covenants, and events of defaults shall be no more onerous in any material respect than the related provisions contained in this Agreement; provided that (i) (A) in the case of any such Indebtedness that takes the form of notes issued pursuant to an indenture, the “default to other indebtedness” event of default contained in the indenture governing such indebtedness shall provide for “cross-acceleration” rather than a “cross-default” and (B) in the case of any other such Indebtedness, any cross-default to the Obligations contained in any agreement evidencing such Indebtedness shall be limited to a cross-payment default and shall be subject to a grace period reasonably acceptable to the Administrative Agent and (ii) in the event that any agreement evidencing such Indebtedness contains financial maintenance covenants, except as may otherwise be agreed to by the Administrative Agent, such financial maintenance covenants shall be limited to those set forth in Sections 8.07 through 8.10, inclusive, of this Agreement (with the financial definitions contained therein to be at least as favorable to the comparable definitions used in this Agreement) and shall be set back from the ratios set forth in Sections 8.07 through 8.10, inclusive, by at least 20%; and

     (h) the aggregate outstanding principal amount of all Permitted Junior Debt shall not at any time exceed $100,000,000; provided that the aggregate outstanding principal amount of all Permitted Junior Debt that is secured by a Lien on all or any portion of the assets of Holdings or its Subsidiaries shall not at any time exceed $50,000,000.

The incurrence of Permitted Junior Debt shall be deemed to be a representation and warranty by Holdings, the Borrower and each of its Subsidiaries that all conditions thereto have been satisfied in all material respects and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder. For the avoidance of doubt, neither Existing Indebtedness nor Refinancing Debt incurred pursuant to Section 8.04(b) shall be considered to be “Permitted Junior Debt”.

          “Permitted Junior Debt Intercreditor Agreement” shall mean an agreement by and among the Collateral Agent and a Permitted Junior Debt Representative for the holders of Junior Lien Obligations and acknowledged by the Borrower and the Guarantors that are obligors in respect of such Junior Lien Obligations providing for the subordination of the Liens securing such Junior Lien Obligations to the Liens securing the Obligations on terms reasonably determined by the Administrative Agent to be customary for intercreditor agreements governing intercreditor matters between similar first lien financings and second lien financings; provided that the terms of such intercreditor agreement shall be no less favorable to the Lenders with respect to the specific matters set forth below than the following: (a) notwithstanding the time, order or method of grant, creation, attachment or perfection of any Liens securing the Obligations and any Liens securing the Junior Lien Obligations (for purposes of this definition, such Liens the “Junior Liens”), the Liens securing the Obligations shall rank senior to any Junior Lien on the Collateral, (b) no holder of any Junior Lien Obligation shall contest the validity or enforceability of the Liens securing the Obligations, (c) until the payment and discharge in full of all Obligations under this Agreement and, unless otherwise agreed to by the respective Approved Third Party Credit Provider, all obligations under all Hedging Agreements and reimbursement agreements related to Third Party Letters of Credit in each case entered into with, or issued or provided by, an Approved Third Party Credit Provider that is a party to the Intercreditor Agreement and the termination of all such Third Party Letters of Credit outstanding, the Collateral Agent will have the sole power to exercise remedies against the Collateral (subject to the right of the holders of the Junior Lien Obligations to take customary (as determined by the Administrative Agent) protective measures with respect to the Junior Liens) and to foreclose upon and dispose of the Collateral, (d) upon any private or public sale of Collateral taken in connection with the exercise of remedies by the Collateral Agent which results in the release of Liens securing the Obligations, the Junior Lien on such item of Collateral will be automatically released, (e) in

connection with any enforcement action with respect to the Collateral or any insolvency or liquidation proceeding involving Holdings, the Borrower or any Guarantor, all proceeds of Collateral will first be applied to the repayment of all Obligations under this Agreement and, unless otherwise agreed to by the respective Approved Third Party Credit Providers, obligations under Hedging Agreements and reimbursement agreements related to Third Party Letters of Credit in each case entered into with, or issued or provided by, Approved Third Party Credit Providers that are a party to the Intercreditor Agreement prior to being applied to the obligations secured by such Junior Liens, (f) if any holder of an obligation secured by Junior Liens receives any proceeds of Collateral in contravention of the foregoing, such proceeds will be turned over to the Collateral Agent, (g) no holder of any obligation secured by Junior Lien may, without the consent of the Lenders (i) seek relief from the automatic stay with respect to any Collateral, (ii) object to any sale of any Collateral in any insolvency or liquidation proceeding which has been consented to by the Collateral Agent (provided that the Junior Liens attach to the proceeds of such sale with the priority set forth in the Permitted Junior Debt Intercreditor Agreement) or (iii) object to any claim of any Lenders or any Approved Third Party Credit Provider to post-petition interest, fees or expenses on account of the Liens securing the Obligations or obligations under Hedging Agreements and reimbursement agreements related to Third Party Letters of Credit in each case entered into with, or issued or provided by, Approved Third Party Credit Providers that are a party to the Intercreditor Agreement and (h) no holder of obligations secured by Junior Liens shall support any plan or reorganization in connection with any insolvency or liquidation proceeding that is in contravention of the Permitted Junior Debt Intercreditor Agreement without the consent of the Required Lenders and the holders of a majority of the outstanding obligations under Hedging Agreements and reimbursement agreements related to Third Party Letters of Credit, in each case entered into with, or issued or provided by, Approved Third Party Credit Providers that are a party to the Intercreditor Agreement.

          “Permitted Junior Debt Representative” shall mean, with respect to any Permitted Junior Debt that is secured on a second lien basis, the trustee, administrative agent, collateral agent, security agent, security trustee or similar agent under the indenture, collateral trust agreement or other agreement pursuant to which such Permitted Junior Debt is issued, incurred or otherwise obtained and each of their successors in such capacities.

          “Permitted Liens” shall have the meaning provided in Section 8.01.

          “Person” shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any Governmental Authority.

          “PIK Interest” shall have the meaning provided in Section 2.06(b).

          “Plan” shall mean any pension plan as defined in Section 3(2) of ERISA, other than a Multiemployer Plan, which is maintained or contributed to by (or to which there is an obligation to contribute of) Holdings, any of its Subsidiaries or an ERISA Affiliate, and each such plan for the five-year period immediately following the latest date on which Holdings, any of its Subsidiaries or any ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

          “Preferred Equity Interests” of any Person shall mean any Equity Interests of such Person that have preferential rights to any other Equity Interests with respect to dividends or redemptions or upon liquidation, and shall include any Qualified Preferred Stock.

          “Pro Forma Basis” shall mean, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (a) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness, to finance a Permitted Acquisition or a Permitted Business Investment) after the first day of the relevant Calculation Period or Test Period, as the case may

be, as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of such Test Period or Calculation Period, as the case may be, (b) the permanent repayment of any Indebtedness (other than revolving Indebtedness, except to the extent accompanied by a corresponding voluntary permanent commitment reduction) after the first day of the relevant Test Period or Calculation Period, as the case may be, as if such Indebtedness had been retired or repaid on the first day of such Test Period or Calculation Period, as the case may be, and (c) any Material Permitted Acquisition, any Material Permitted Business Investment or any Material Asset Sale then being consummated as well as any other Material Permitted Acquisition, any other Material Permitted Business Investment or any other Material Asset Sale if consummated after the first day of the relevant Test Period or Calculation Period, as the case may be, and on or prior to the date of such calculation, with the following rules to apply in connection therewith:

     (i) all Indebtedness (A) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition or a Permitted Business Investment) incurred or issued after the first day of the relevant Test Period or Calculation Period (whether incurred to finance a Permitted Acquisition or a Permitted Business Investment, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of such Test Period or Calculation Period, as the case may be, and remain outstanding through the date of determination and (B) (other than revolving Indebtedness, except to the extent accompanied by a corresponding voluntary permanent commitment reduction) permanently retired or redeemed after the first day of the relevant Test Period or Calculation Period, as the case may be, shall be deemed to have been retired or redeemed on the first day of such Test Period or Calculation Period, as the case may be, and remain retired through the date of determination;

     (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (A) the rate applicable thereto, in the case of fixed rate indebtedness, or (B) the rates which would have been applicable thereto during the respective period when same was deemed outstanding, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually outstanding); provided that all Indebtedness (whether actually outstanding or deemed outstanding) bearing interest at a floating rate of interest shall be tested on the basis of the rates applicable at the time the determination is made pursuant to said provisions; and

     (iii) in making any determination of Consolidated EBITDAX on a Pro Forma Basis, pro forma effect shall be given to any Material Permitted Acquisition, any Material Permitted Business Investment, or any Material Asset Sale if effected during the respective Calculation Period or Test Period (or, except for the purposes of determining quarterly compliance with Sections 8.08 through 8.10 pursuant to the terms thereof, thereafter and on or prior to the date of the respective calculation) as if same had occurred on the first day of the respective Calculation Period or Test Period, as the case may be, and taking into account factually supportable and identifiable cost savings and expenses which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost savings or expenses were realized on the first day of the respective period.

          “Probable Reserve Value” shall mean, as of any date of determination, 50% of the present value of future cash flow from Probable Reserves on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties as set forth in the most recent Reserve Report delivered pursuant to Section 7.01(d), utilizing (a) in the case of any Oil and Gas Properties located in the United States or any of its territories

or possessions (including U.S. Federal waters in the Gulf of Mexico), the Three-Year Strip Price for crude oil (WTI ▇▇▇▇▇▇▇) and natural gas (▇▇▇▇▇ Hub), quoted on the New York Mercantile Exchange (or its successor), (b) in the case of any Oil and Gas Properties located in the North Sea, the Three-Year Strip Price for crude oil (North Sea ▇▇▇▇▇) and natural gas (UK National Balancing Point), in each case quoted on the International Petroleum Exchange (or its successor) and (c) in the case of any Oil and Gas Properties located in any other jurisdiction, the Three-Year Strip Price for crude oil and natural gas, in each case quoted on any commodities exchange or other price quotation source generally recognized in the oil and gas industry in such jurisdiction and reasonably acceptable to the Administrative Agent, in the case of each of clauses (a), (b) and (c), as of the date as of which the information set forth in such Reserve Report is provided (as adjusted for basis differentials) and utilizing a 10% discount rate. For purposes of calculating Probable Reserve Value, any future cash flow calculations set forth in any Reserve Report and made in any currency other than Dollars shall be converted into Dollars based on the Exchange Rate on the date as of which the information set forth in such Reserve Report is provided.

          “Probable Reserves” shall mean the estimated quantities of crude oil, condensate, natural gas and natural gas liquids that geological and engineering data suggests are more likely than not to be recoverable with presently available technology at an economically viable cost (as determined in accordance with the guidelines of the Society of Petroleum Engineers).

          “Project Documents” shall mean and include in relation to each Oil and Gas Property of Holdings or any of its Subsidiaries (a) each joint operating agreement and/or unitization and unit operating agreement relating thereto, each agreement relating to the development thereof or the transportation, processing and/or storage of production therefrom and each agreement for the sale or marketing of production therefrom and each other major agreement relating to such Oil and Gas Property and/or Hydrocarbons produced therefrom, (b) each Authorization required for the lawful exploitation, development, or operation of such Oil and Gas Property or the production, transportation or sale of Hydrocarbons therefrom (and including, without limitation, any Hydrocarbons production license), (c) any development plan approved by any relevant operating committee and/or any Governmental Authority relating to that Oil and Gas Property and (d) any other document designated as such by the Administrative Agent acting reasonably.

          “Projections” shall mean the projections that were prepared by or on behalf of the Borrower in connection with the Transaction and this Agreement and delivered to the Administrative Agent and the Lenders prior to the Funding Date.

          “Protected Party” shall mean any Agent or Lender which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Credit Document.

          “Proved Developed Reserves” shall mean oil and gas reserves that can be expected to be recovered through existing ▇▇▇▇▇ with existing equipment and operating methods.

          “Proved Reserves” shall mean the estimated quantities of crude oil, condensate, natural gas and natural gas liquids that geological and engineering data demonstrates with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions (i.e., prices and costs as of the date the estimate is made).

          “PV-10 Value” shall mean, as of any date of determination, the present value of future cash flows from Proved Reserves on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties as set forth in the most recent Reserve Report delivered pursuant to Section 7.01(d), utilizing (a) in the case of any Oil and Gas Properties located in the United States or any of its territories or possessions (including

U.S. Federal waters in the Gulf of Mexico), the Three-Year Strip Price for crude oil (WTI ▇▇▇▇▇▇▇) and natural gas (▇▇▇▇▇ Hub), quoted on the New York Mercantile Exchange (or its successor), (b) in the case of any Oil and Gas Properties located in the North Sea, the Three-Year Strip Price for crude oil (North Sea ▇▇▇▇▇) and natural gas (UK National Balancing Point), in each case quoted on the International Petroleum Exchange (or its successor) and (c) in the case of any Oil and Gas Properties located in any other jurisdiction, the Three-Year Strip Price for crude oil and natural gas, in each case quoted on any commodities exchange or other price quotation source generally recognized in the oil and gas industry in such jurisdiction and reasonably acceptable to the Administrative Agent, in the case of each of clauses (a), (b) and (c), as of the date as of which the information set forth in such Reserve Report is provided (as adjusted for basis differentials) and utilizing a 10% discount rate. For purposes of calculating PV-10 Value, any future cash flow calculations set forth in any Reserve Report and made in any currency other than Dollars shall be converted into Dollars based on the Exchange Rate on the date as of which the information set forth in such Reserve Report is provided.

          “Qualified Credit Party” shall mean Holdings, the Borrower and each Wholly-Owned Subsidiary Guarantor that is organized under the laws of the United States or any State thereof or the laws of England and Wales.

          “Qualified Preferred Stock” shall mean any Preferred Equity Interests of Holdings so long as the terms of any such Preferred Equity Interests (a) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision prior to February 16, 2014, (b) do not require the cash payment of dividends or distributions that would otherwise be prohibited by the terms of this Agreement or any other agreement or contract of Holdings or any of its Subsidiaries, (c) do not contain any covenants (other than periodic reporting requirements) and (d) do not grant the holders thereof any voting rights except for (i) voting rights required to be granted to such holders under applicable law and (ii) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of Holdings or liquidations involving Holdings.

          “Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

          “Recovery Event” shall mean the receipt by Holdings or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable (a) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of Holdings or any of its Subsidiaries or (b) under any policy of insurance maintained by any of them.

          “Refinancing” shall mean the refinancing transactions described in Section 5.06.

          “Refinancing Debt” shall have the meaning provided in Section 8.04(b).

          “Register” shall have the meaning provided in Section 11.15.

          “Regulation D” shall mean Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

          “Regulation T” shall mean Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof.

          “Regulation U” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof.

          “Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof.

          “Release” shall mean actively or passively disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping or migrating into or upon any land or water or air, or otherwise entering into the environment.

          “Relevant Reinvestment Period” shall mean, with respect to any Asset Sale or Recovery Event, the earlier of the dates referred to in clauses (a) and (b) below occurring after the receipt of Net Sale Proceeds or Net Insurance Proceeds by Holdings or any of its Subsidiaries, as the case may be, from such Asset Sale or Recovery Event: (a) 360 days following the receipt of such Net Sale Proceeds or Net Insurance Proceeds, as the case may be, and (b) the date upon which Holdings or the relevant Subsidiary determines not to reinvest such Net Sale Proceeds or Net Insurance Proceeds, as the case may be, from the respective Asset Sale or Recovery Event, as the case may be.

          “Replaced Lender” shall have the meaning provided in Section 2.08.

          “Replacement Lender” shall have the meaning provided in Section 2.08.

          “Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA other than those events as to which the 30-day notice period is waived under PBGC Regulations promulgated under Section 4043 of ERISA.

          “Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding Term Loans (or, if determined prior to the Funding Date, Commitments) at such time represents at least a majority of the sum of all outstanding Term Loans (or, if determined prior to the Funding Date, the Total Commitment) of Non-Defaulting Lenders.

          “Reserve Coverage Ratio” shall mean, on any date of determination, the ratio of (a) the sum of (i) PV-10 Value on such date and (ii) Probable Reserve Value on such date to (b) Consolidated Net Secured Indebtedness on such date.

          “Reserve Report” shall mean (a) each annual reserve report prepared by Holdings and audited by an Independent Engineering Firm, in form and detail consistent with the Reserve Report delivered pursuant to Section 5.13 or otherwise reasonably acceptable to the Administrative Agent and (b) each interim reserve report prepared by Holdings, in form and detail reasonably acceptable to the Administrative Agent (it being understood and agreed that Holdings will prepare each such interim reserve report based on the most recent annual Reserve Report, as adjusted for actual production, operating costs, capital costs and net additions of Proved Reserves and Probable Reserves during the calendar months of the respective year specified therein), in each case with respect to Oil and Gas Properties of Holdings and each of its Subsidiaries as of (i) December 31 of the year immediately preceding the year in which such report is delivered pursuant to Section 7.01(d), in the case of an annual reserve report or (ii) June 30 of the year in which such report is delivered pursuant to Section 7.01(d) (or such other date specified therein in the event Holdings has elected to deliver additional reserve reports pursuant to Section 7.01(d)), in the case of semi-annual or additional reserve reports. Each Reserve Report prepared by Holdings shall be certified by the chief engineering officer of Holdings as being accurate in all material respects.

          “Restricted” shall mean, when referring to cash or Cash Equivalents of Holdings or any of its Subsidiaries, that such cash or Cash Equivalents (a) appears (or would be required to appear) as “restricted” on a consolidated balance sheet of Holdings or any such Subsidiary (unless such appearance is related to the Credit Documents or Liens created thereunder), (b) are subject to any Lien in favor of any

Person other than (i) the Collateral Agent for the benefit of the Secured Creditors and (ii) holders of Liens permitted under Section 8.01(o), or (c) are not otherwise generally available for use by Holdings or such Subsidiary; provided that cash or Cash Equivalents of Holdings and its Subsidiaries that have been pledged to secure the repayment of outstanding Consolidated Indebtedness (other than the Obligations) shall be deemed not to be Restricted for the purposes of this Agreement.

          “Returns” shall have the meaning provided in Section 6.09.

          “S&P” shall mean Standard & Poor’s Ratings Services, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.

          “Scheduled Repayment” shall have the meaning provided in Section 4.02(a).

          “Scheduled Repayment Date” shall have the meaning provided in Section 4.02(a).

          “Scottish Security” shall have the meaning provided in Section 5.09(f).

          “SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions.

          “Secured Creditors” shall have the meaning assigned that term in the respective Security Documents.

          “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

          “Security Document” shall mean and include each of the U.S. Security Agreement, each Mortgage, the English Security Documents, the Dutch Pledge Agreement and the Scottish Security, after the execution and delivery thereof, each Additional Security Document and any other related document, agreement or grant pursuant to which Holdings or any of its Subsidiaries grants, perfects or continues a security interest in favor of the Collateral Agent for the benefit of the Secured Creditors.

          “Shareholders’ Agreements” shall have the meaning provided in Section 5.05(b).

          “Subsidiaries Guaranty” shall have the meaning provided in Section 5.09(a).

          “Subsidiary” shall mean, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person or (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Holdings.

          “Subsidiary Guarantor” shall mean each Subsidiary of Holdings whether existing on the Effective Date or established, created or acquired after the Effective Date, that has executed and delivered the Subsidiaries Guaranty or has otherwise become a party thereto by means of the execution and delivery of a joinder, accession or similar agreement (in form and substance satisfactory to the Administrative Agent) by such Subsidiary unless and until such time as the respective Subsidiary is released from all of its obligations under the Subsidiaries Guaranty in accordance with the terms and provisions thereof. The Subsidiary Guarantors on the Effective Date are listed on Schedule 1.01(b).

          “Syndication Date” shall mean the earlier of (a) the date on which the Administrative Agent determines in its sole discretion (and notifies the Borrower) that the primary syndication (and the resultant addition of Persons as Lenders pursuant to Section 11.04(b)) has been completed and (b) December 16, 2010.

          “Syndication Letter” shall mean that certain Syndication Letter, dated the date hereof, among Holdings, the Borrower and Cyan Partners, LP.

          “Synthetic Lease” shall mean a lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee and (b) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

          “Tax” shall mean any tax, levy impost, duty fee, assessment or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

          “Tax Credit” shall mean a credit against, relief or remission for, or repayment of any Tax.

          “Tax Deduction” shall mean a deduction or withholding for or on account of Tax from a payment under a Credit Document.

          “Tax Payment” shall mean either the increase in a payment made by a Credit Party to a Lender or Agent under Section 4.04(a) or a payment under Section 4.04(b).

          “Tax Refund” shall mean a refund of any Tax Deduction.

          “Tax Sharing Agreements” shall have the meaning provided in Section 5.05(f).

          “Term Loan” shall mean have the meaning provided in Section 2.01.

          “Test Period” shall mean each period of four consecutive fiscal quarters of Holdings then last ended, in each case taken as one accounting period; provided that for any Test Period that includes fiscal quarters occurring prior to the Funding Date, the rules set forth in the succeeding sentences shall apply. If the respective Test Period (a) includes the fiscal quarter of Holdings ended December 31, 2009, Consolidated EBITDAX for such fiscal quarter shall be deemed to be $18,140,000, and (b) includes the fiscal quarter of Holdings ended March 31, 2010, Consolidated EBITDAX for such fiscal quarter shall be deemed to be $9,720,000; provided that Consolidated EBITDAX for the foregoing periods shall be increased or decreased (as applicable) in accordance with the definition of Pro Forma Basis by the amount of Consolidated EBITDAX for such period attributable to (i) any Acquired Entity or Business acquired pursuant to a Material Permitted Acquisition or Oil and Gas Properties acquired pursuant to Material Permitted Business Investments and (ii) any Person or assets disposed of pursuant to any Material Asset Sale, in each case consummated on or prior to December 31, 2010. Such attributable Consolidated EBITDAX shall be determined on a basis consistent with the definition of Consolidated EBITDAX with any necessary reference changes.

          “Third Party Letter of Credit” shall mean a letter of credit issued by an Approved Third Party Credit Provider for the account of Holdings or any of its Subsidiaries in support of obligations permitted by this Agreement.

          “Three-Year Strip Price” shall mean, as of any date of determination, (a) for the 36-month period commencing with the month immediately following the month in which the date of determination occurs, the monthly futures contract prices for crude oil and natural gas for the 36

succeeding months as quoted on the applicable commodities exchange or other price quotation source as contemplated in the definitions of “PV-10 Value” and “Probable Reserve Value” and (b) for periods after such 36-month period, the average of such quoted prices for the period from and including the 25th month in such 36-month period through the 36th month in such period.

          “Total Commitment” shall mean, at any time, the sum of the Commitments of each of the Lenders at such time.

          “Total Leverage Ratio” shall mean, on any date of determination, the ratio of (a) Consolidated Net Indebtedness on such date (calculated exclusive of any Indebtedness of Holdings or any of its Subsidiaries of the type described in clause (g) of the definition of Indebtedness) to (b) Consolidated EBITDAX for the Test Period most recently ended on or prior to such date; provided that for purposes of any calculation of the Total Leverage Ratio pursuant to this Agreement, Consolidated EBITDAX shall be determined on a Pro Forma Basis in accordance with the definition thereof.

          “Transaction” shall mean, collectively, (a) the occurrence of the Funding Date, (b) the consummation of the Refinancing, (c) the execution, delivery and performance by each Credit Party of the Credit Documents to which it is a party, (d) the incurrence of Term Loans on the Funding Date and the use of proceeds thereof, and (e) the payment of all fees and expenses in connection with the foregoing.

          “Treaty” has the meaning provided in the definition of Treaty State appearing herein.

          “Treaty Lender” shall mean a Lender which:

     (a) is treated as a resident of a Treaty State for the purposes of the Treaty;

     (b) does not carry on a business in the jurisdiction of the Borrower through a permanent establishment with which that Lender’s participation in the Loan is effectively connected;

     (c) meets all other conditions in the relevant Treaty for full exemption from Tax imposed by the jurisdiction of incorporation of the relevant Credit Party on interest, except that for this purpose it shall be assumed that the following are satisfied:

     (i) any condition which relates (expressly or by implication) to there not being a special relationship between the Borrower and a Lender or between both of them and another person, or to the amounts or terms of any Term Loan or the Credit Documents; and

     (ii) any necessary procedural formalities.

          “Treaty State” shall mean a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.

          “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.

          “UK Sector” shall mean the jurisdiction of United Kingdom commonly referred to as the UK Sector — North Sea.

          “Unfunded Current Liability” of any Plan subject to Title IV of ERISA shall mean the amount, if any, by which the value of the accumulated plan benefits under such Plan determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the Fair Market Value of all plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), but only to the extent such excess could reasonably be expected to result in material liability to Holdings or a Subsidiary.

          “United Kingdom” and “UK” shall mean each of England, Wales, Northern Ireland and Scotland, as the case may be, and shall include the U.K. Sector — North Sea.

          “United States” and “U.S.” shall each mean the United States of America and any of its territories or possessions (including U.S. Federal waters in the Gulf of Mexico).

          “Unrestricted” shall mean, when referring to cash or Cash Equivalents of Holdings or any of its Subsidiaries, that such cash or Cash Equivalents are not Restricted; provided that cash on deposit in the BNP Cash Collateral Account shall be deemed to be Unrestricted cash of Holdings and its Subsidiaries.

          “U.S. Credit Party” shall mean each Credit Party incorporated under the laws of the United States or any state thereof.

          “U.S. Oil and Gas Properties” shall mean the Oil and Gas Properties of Holdings and its U.S. Subsidiaries located in the United States.

          “U.S. Security Agreement” shall have the meaning set forth in Section 5.09(b).

          “U.S. Subsidiary” of any Person shall mean any Subsidiary of such Person incorporated or organized in the United States or any State or territory thereof of the District or Columbia.

          “VAT” shall mean value added tax as provided for in the UK’s Value Added Tax ▇▇▇ ▇▇▇▇ and any other tax of a similar nature in any jurisdiction.

          “Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100% of whose capital stock is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time (other than, in the case of a Non-U.S. Subsidiary of Holdings, with respect to the preceding clauses (a) and (b), directors’ qualifying shares and/or other nominal amounts of shares required to be held by Persons other than Holdings and its Subsidiaries under applicable law).

          “Wholly-Owned Subsidiary Guarantor” shall mean, any Wholly-Owned Subsidiary of Holdings which is a Subsidiary Guarantor.

          “Wholly-Owned U.S. Subsidiary” shall mean, as to any Person, any U.S. Subsidiary of such Person that is a Wholly-Owned Subsidiary.

          SECTION 2. Amount and Terms of Credit.

          2.01. The Commitments. Subject to and upon the terms and conditions set forth herein, each Lender severally agrees to make a term loan (each, a “Term Loan” and, collectively, the “Term Loans”) to the Borrower, which such Term Loans (i) shall be made pursuant to a single drawing

on the Funding Date, (ii) shall be denominated in Dollars and (iii) shall be made by each Lender in the aggregate principal amount which does not exceed the Commitment of such Lender on the Funding Date. All references herein to a “Term Loan” or “Term Loans”, to “principal” or the “principal amount” of any Term Loan or Term Loans and other terms of like import shall mean 100% of the Total Commitment (immediately prior to the incurrence of Term Loans on the Funding Date) Term Loans incurred by the Borrower on the Funding Date plus PIK Interest that is added to outstanding principal of Term Loans pursuant to Section 2.06 minus repayments and prepayments of Term Loans pursuant to this Agreement. Once repaid, Terms Loans may not be reborrowed.

          2.02. Notice of Borrowing. (a) When the Borrower desires to incur Term Loans on the Funding Date, the Borrower shall give the Administrative Agent at the Notice Office at least one Business Day’s prior notice thereof; provided that any such notice shall be deemed to have been given on a certain day only if given before 11:00 A.M. (New York City time) on such day. Such notice (the “Notice of Borrowing”), shall be irrevocable and shall be in writing, or by telephone promptly confirmed in writing, in the form of Exhibit A, appropriately completed to specify: (i) the aggregate principal amount of the Term Loans to be incurred pursuant to such Borrowing and (ii) the date of such Borrowing (which shall be a Business Day). The Administrative Agent shall promptly give each Lender notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing.

          (b) Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice of any Borrowing or prepayment of Term Loans, the Administrative Agent may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower, prior to receipt of written confirmation. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice of the Borrowing or prepayment of Term Loans, as the case may be, absent manifest error.

          2.03. Disbursement of Funds. No later than 1:00 P.M. (New York City time) on the date specified in the Notice of Borrowing, each Lender will make available its pro rata portion (determined in accordance with Section 2.05) of the Borrowing requested to be made on such date. All such amounts will be made available in Dollars and in immediately available funds at the Payment Office, and the Administrative Agent will make available to the Borrower at the Payment Office the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent shall have been notified by any Lender prior to the date of such Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of the Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent also shall be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate for the first three days and at the interest rate otherwise applicable to the Term Loans for each day thereafter and (ii) if recovered from the Borrower, the rate of interest applicable to the Term Loans, as determined pursuant to Section 2.06. Nothing in this Section

2.03 shall be deemed to relieve any Lender from its obligation to make Term Loans hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Term Loans hereunder.

          2.04. Notes. (a) The Borrower’s obligation to pay the principal of, and interest on, the Term Loans made by each Lender shall be stated in the Register maintained by the Administrative Agent pursuant to Section 11.15 and shall also be stated in a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B, with blanks appropriately completed in conformity herewith (each, a “Note” and, collectively, the “Notes”).

          (b) Each Lender will note on its internal records the amount of Term Loans made by it (as well as any increase thereto as a result of the payment of PIK Interest) and each payment in respect thereof and prior to any transfer of any of its Notes will endorse on the reverse side thereof the outstanding principal amount thereof. Failure to make any such notation or any error in such notation shall not affect the Borrower’s obligations in respect of such Term Loans. Although under no obligation to do so, any Lender may, following an increase in the outstanding principal amount of its Term Loans as a result of payment of PIK Interest, request for a replacement Note in an aggregate principal amount which reflects such increase or increases (although any failure of a Lender to request such replacement Note shall in no event affect the Borrower’s obligation to pay the entire principal amount of the Term Loans of such Lender).

          (c) Notwithstanding anything to the contrary contained above in this Section 2.04, no failure of any Lender to obtain, maintain or produce a Note shall affect, or in any manner impair, the obligations of the Borrower to pay the Term Loans (and all related Obligations) incurred by the Borrower which would otherwise be stated therein in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to any Credit Document. Any Lender which does not have a Note shall in no event be required to make the notations otherwise described in preceding clause (b). At any time when any Lender becomes a party to this Agreement, the Borrower shall promptly execute and deliver to the respective Lender a Note in an amount equal to the aggregate principal amount of the Term Loans made or held by such Lender.

          2.05. Pro Rata Borrowings. The Borrowing of Term Loans under this Agreement shall be incurred from the Lenders pro rata on the basis of their Commitments. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Term Loans hereunder and that each Lender shall be obligated to make the Term Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Term Loans hereunder.

          2.06. Interest. (a) The Borrower agrees to pay cash interest (“Cash Interest”) in respect of the unpaid principal amount of the Term Loans from the date of Borrowing thereof until the maturity thereof (whether by acceleration or otherwise), at a rate per annum equal to 12%.

          (b) In addition to the payment of Cash Interest pursuant to preceding clause (a), the Borrower shall pay additional interest on the Term Loans at a rate per annum equal to 3.0% “in kind”, with the amount of interest accruing pursuant to this clause (b) being added to the outstanding principal amount of the Term Loans on each Interest Payment Date; provided that in the event the Borrower provides written notice thereof to the Administrative Agent prior to 11:00 A.M. (New York City time) at least two Business Days prior to the relevant Interest Payment Date, the Borrower may pay in cash interest accrued pursuant to this clause (b) that is payable on such Interest Payment Date. Such paid-in-kind interest (“PIK Interest”) shall be deemed paid, and the principal amount of the Term Loans as so increased shall be deemed “Term Loans” hereunder and under the other Credit Documents for all purposes and shall thereafter accrue interest in accordance with the terms of this Agreement.

          (c) (i) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Term Loan and (ii) all other overdue amounts payable hereunder and under any other Credit Document shall bear interest at a rate per annum equal to 17%. Interest that accrues under this Section 2.06(c) shall be payable on demand.

          (d) Accrued (and theretofore unpaid) interest on Term Loans shall be payable (i) quarterly in arrears on each Interest Payment Date, (ii) on the date of any repayment or prepayment (on the amount repaid or prepaid) and (iii) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

          2.07. Change of Lending Office. Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.09 or 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Term Loans affected by such event; provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of such Section. Nothing in this Section 2.07 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Section 2.09 or 4.04.

          2.08. Replacement of Lenders. (a) If any Lender becomes a Defaulting Lender, (b) upon the occurrence of any event giving rise to the operation of Section 2.09 or 4.04 with respect to any Lender which results in such Lender charging to the Borrower increased costs in excess of those being generally charged by the other Lenders or (c) in the case of a refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to this Agreement which has been approved by the Required Lenders as (and to the extent) provided in Section 11.12(b), the Borrower shall have the right, in accordance with Section 11.04(b), if no Default or Event of Default then exists or would exist after giving effect to such replacement, to replace such Lender (the “Replaced Lender”) with one or more other Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) and each of which shall be reasonably acceptable to the Administrative Agent; provided that:

     (i) at the time of any replacement pursuant to this Section 2.08, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the Borrower) pursuant to which the Replacement Lender shall acquire all of the Commitments (if any) and outstanding Term Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the principal of, and all accrued and unpaid interest on, all outstanding Term Loans of the respective Replaced Lender; and

     (ii) all obligations of the Borrower then owing to the Replaced Lender (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.

Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.08, the Administrative Agent shall be entitled (but not obligated) and authorized to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.08 and Section 11.04. Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) above, recordation of the assignment on the Register by the Administrative Agent pursuant to Section 11.15 and delivery to the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the

Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 4.04, 10.06, 11.01 and 11.06), which shall survive as to such Replaced Lender.

          2.09. Capital Adequacy. If any Lender determines that after the Effective Date the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by the NAIC or any Governmental Authority, central bank or comparable agency, will have the effect of increasing the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender based on the existence of such Lender’s Commitment hereunder or its obligations hereunder, then the Borrower agrees to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable; provided that such Lender’s determination of compensation owing under this Section 2.09 shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.09, will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis for calculation of such additional amounts.

          2.10. Incremental Term Loans. The Borrower may at any time or from time to time after the Syndication Date (or earlier if approved by the Administrative Agent), by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request one or more incremental term loans be made hereunder (the “Incremental Term Loans”); provided that (i) both at the time of any such request and upon the effectiveness of any Incremental Amendment referred to below, no Default or Event of Default shall exist and at the time that any such Incremental Term Loan is made (and after giving effect thereto) no Default or Event of Default shall exist and (ii) Holdings shall be in compliance with the covenants set forth in Sections 8.08 through 8.10 determined on a Pro Forma Basis as of the date of the most recently ended Test Period (or, if no Test Period cited in such sections has passed, the covenants in Sections 8.08 through 8.10 for the first Test Period cited in such Sections shall be satisfied as of the last four quarters ended), in each case, as if such Incremental Term Loans had been outstanding on the last day of such fiscal quarter of Holdings for testing compliance therewith. Each Incremental Term Loan shall be in an aggregate principal amount that is not less than $5,000,000. Notwithstanding anything to the contrary herein, the aggregate principal amount of the Incremental Term Loans shall not exceed $10,000,000. The Incremental Term Loans shall have the same terms and conditions applicable to the Term Loans. Each notice from the Borrower pursuant to this Section 2.10 shall set forth the requested amount of the relevant Incremental Term Loans. Incremental Term Loans may be made by any existing Lender (but no existing Lender will have any obligation to make a portion of any Incremental Term Loan) or by any other bank or other financial institution that is an Eligible Transferee (any such other bank or other financial institution being called an “Additional Lender”); provided that the Administrative Agent shall have consented (not to be unreasonably withheld, conditioned or delayed) to such Additional Lender’s making such Incremental Term Loans. Commitments in respect of Incremental Term Loans shall be provided pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Credit Documents, executed by Holdings, the Borrower, each Lender agreeing to provide such commitments, if any, each Additional Lender, if any, and the Administrative Agent. The Incremental Amendment may, with the consent of Holdings, the Borrower and the Administrative Agent, but without the consent of any other Credit Party, the Collateral Agent or Lenders, effect such amendments to this Agreement and the

other Credit Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.10. The Borrower may use the proceeds of the Incremental Term Loans for any purpose not prohibited by this Agreement. No Lender shall be obligated to provide any Incremental Term Loans, unless it so agrees.

          SECTION 3. Fees; Reductions of Commitment.

          3.01. Fees. (a) The Borrower agrees to pay to the Administrative Agent such fees as may have been, or are hereafter, agreed to in writing from time to time by Holdings, or any of its Subsidiaries and the Administrative Agent.

          (b) Voluntary prepayments or repayments of principal of Term Loans pursuant to Sections 4.01 and all repayments of principal of Term Loans required pursuant to Section 9 as a result of the acceleration thereof, will be subject to payment to the Administrative Agent, for the ratable account of each Lender with outstanding Term Loans, of a fee as follows: (i) if made during the period from and including August 16, 2011 to and including August 15, 2012, an amount equal to 3.0% of the aggregate principal amount of such prepayment or repayment and (ii) if made during the period from and including August 16, 2012 to and including August 15, 2013, an amount equal to 1.0% of the aggregate principal amount of such prepayment or repayment. Such fees shall be due and payable upon the date of any voluntary prepayment or the due date of such required repayment, as the case may be.

          3.02. Voluntary Termination or Reduction of Commitments. Upon at least three Business Day’s prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time prior to the Funding Date, without premium or penalty to terminate the Total Commitment in whole, or reduce it in part, pursuant to this Section 3.02, in an integral multiple of $1,000,000 in the case of partial reductions to the Total Commitment; provided that each such reduction shall apply proportionately to permanently reduce the Commitment of each Lender.

          3.03. Mandatory Reduction of Commitments. (a) The Total Commitment (and the Commitment of each Lender) shall terminate in its entirety at 5:00 p.m. on August 21, 2010 unless the Funding Date shall have occurred on or prior to such time.

          (b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Commitment (and the Commitment of each Lender) shall terminate in its entirety on the Funding Date (after giving effect to the incurrence of Term Loans on such date).

          SECTION 4. Prepayments; Payments; Taxes.

          4.01. Voluntary Prepayments. The Borrower shall not be permitted to make any voluntary prepayments of Term Loans prior to August 16, 2011. The Borrower shall have the right to prepay the Term Loans, without premium or penalty (except as provided in Section 3.01(b)), in whole or in part at any time and from time to time on or after August 16, 2011 (but not before such date) on the following terms and conditions: (i) the Borrower shall give the Administrative Agent prior to 12:00 Noon (New York City time) at the Notice Office at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay Term Loans, which notice shall specify the amount of such prepayment and which notice the Administrative Agent shall, promptly transmit to each of the Lenders; (ii) each partial prepayment of Term Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $1,000,000 (or such lesser amount as is acceptable to the Administrative Agent); (iii) each prepayment of Term Loans pursuant to this Section 4.01 shall be applied pro rata among such Term Loans; (iv) each prepayment of Term Loans pursuant to this Section 4.01 shall reduce the then remaining Scheduled Repayments on a pro rata basis (based on the then

remaining principal amount of each such Scheduled Repayments after giving effect to all prior reductions thereto); and (v) at the time of any such prepayment of Term Loans, the Borrower shall pay to the Administrative Agent the applicable fee required under Section 3.01(b). No voluntary prepayments of Term Loans shall be permitted except in accordance with this Section 4.01.

          4.02. Mandatory Repayments. (a) In addition to any other mandatory repayments pursuant to this Section 4.02, on the last Business Day of each fiscal quarter ending on each date set forth below and on the Maturity Date (each, a “Scheduled Repayment Date”), the Borrower shall be required to repay that principal amount of Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Section 4.01 or 4.02(g), a “Scheduled Repayment”):

Fiscal Quarter Ending		Amount
December 31, 2010		$	375,000
March 31, 2011		$	375,000
June 30, 2011		$	375,000
September 30, 2011		$	375,000
December 31, 2011		$	375,000
March 31, 2012		$	375,000
June 30, 2012		$	375,000
September 30, 2012		$	375,000
December 31, 2012		$	375,000
March 31, 2013		$	375,000
June 30, 2013		$	375,000
Maturity Date		$145,875,000 (plus amounts attributable to PIK Interest added to outstanding principal of Term Loans pursuant to this Agreement)

          (b) In addition to any other mandatory repayments pursuant to this Section 4.02, within five Business Days following each date on or after the Funding Date upon which Holdings or any of its Subsidiaries receives any cash proceeds from any capital contribution or any sale or issuance of its Equity Interests (other than (i) issuances of Equity Interests to Holdings or any of its Subsidiaries to the extent made by any Subsidiary of Holdings, (ii) any capital contributions to any Subsidiary of Holdings to the extent made by Holdings or any of its Subsidiaries, (iii) sales or issuances of Holdings Common Stock to employees, officers and/or directors of Holdings and its Subsidiaries (including as a result of the exercise of any options with respect thereto) and (iv) proceeds from capital contributions to, or the issuance of Equity Interests of, Holdings to finance Permitted Acquisitions, Permitted Business Investments, Capital Expenditures, the repayment of outstanding Indebtedness of Holdings and its Subsidiaries or operating and development expenses), an amount equal to 100% of the Net Cash Proceeds of such capital contribution or sale or issuance of Equity Interests shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(g) and (h).

          (c) In addition to any other mandatory repayments pursuant to this Section 4.02, within five Business Days following each date on or after the Funding Date upon which Holdings or any of its Subsidiaries receives any cash proceeds from any issuance or incurrence by Holdings or any of its Subsidiaries of Indebtedness (other than Indebtedness permitted to be incurred pursuant to Section 8.04),

an amount equal to 100% of the Net Cash Proceeds of the respective issuance or incurrence of Indebtedness shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(g) and (h).

          (d) In addition to any other mandatory repayments pursuant to this Section 4.02, within five Business Days following each date on or after the Funding Date upon which Holdings or any of its Subsidiaries receives any cash proceeds from any Material Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(g) and (h); provided, however, that such Net Sale Proceeds shall not be required to be so applied so long as no Default or Event of Default then exists and the Borrower delivers a certificate (which certificate shall set forth the estimates of the Net Sale Proceeds to be so expended) to the Administrative Agent within five Business Days following receipt of such Net Sale Proceeds stating that such Net Sale Proceeds shall be used to purchase assets (including pursuant to Permitted Acquisitions and Permitted Business Investments, but excluding working capital) used or to be used in the businesses permitted pursuant to Section 8.14 or to make Capital Expenditures, in each case within the Relevant Reinvestment Period, and provided further, that if all or any portion of such Net Sale Proceeds not required to be so applied as provided above in this Section 4.02(d) are not so reinvested within such Relevant Reinvestment Period, such remaining portion shall be applied on the last day of such Relevant Reinvestment Period as otherwise provided above in this Section 4.02(d) without regard to the preceding proviso.

          (e) In addition to any other mandatory repayments pursuant to this Section 4.02, within five Business Days following each date on or after the Funding Date upon which Holdings or any of its Subsidiaries receives any cash proceeds from any Recovery Event, an amount equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(g) and (h); provided, however, that such Net Insurance Proceeds shall not be required to be so applied so long as no Default or Event of Default then exists and the Borrower has delivered a certificate to the Administrative Agent within five Business Days following receipt of such Net Insurance Proceeds stating that such Net Insurance Proceeds shall be used to replace or restore any properties or assets in respect of which such Net Insurance Proceeds were paid, to purchase assets used or to be used in the business permitted pursuant to Section 8.14 or to make Capital Expenditures, in each case within the Relevant Reinvestment Period (which certificate shall set forth the estimates of the Net Insurance Proceeds to be so expended), and provided further, that if all or any portion of such Net Insurance Proceeds not required to be so applied pursuant to the preceding proviso are not so used within the Relevant Reinvestment Period, such remaining portion shall be applied on the last day of such Relevant Reinvestment Period as provided above in this Section 4.02(e) without regard to the immediately preceding proviso.

          (f) In addition to any other mandatory repayments pursuant to this Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of the Excess Cash Flow for the related Excess Cash Payment Period shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(g) and (h).

          (g) Each amount required to be applied pursuant to Sections 4.02(b), (c), (d), (e) and (f) in accordance with this Section 4.02(g) shall be applied to repay the outstanding principal amount of the Term Loans, with such repayment of Term Loans to be applied to reduce the then remaining Scheduled Repayments on a pro rata basis (based upon the then remaining principal amounts of such Scheduled Repayments after giving effect to all prior reductions thereto).

          (h) Each repayment of any Term Loans made pursuant to Sections 4.02(a), (b), (c), (d), (e) and (f) shall be applied pro rata among the Lenders holding such Term Loans.

          (i) In addition to any other mandatory repayments pursuant to this Section 4.02, all then outstanding Term Loans shall be repaid in full on the Maturity Date.

          4.03. Method and Place of Payment. All payments of principal and Cash Interest under this Agreement and under any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York City time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.

          4.04. Tax Gross-Up and Indemnities

          (a) Tax gross-up.

          (i) Each Credit Party shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

          (ii) the Borrower shall promptly upon becoming aware that a Credit Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Administrative Agent accordingly.

          (iii) If a Tax Deduction is required by law to be made by a Credit Party, the amount of the payment due from that Credit Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

          (iv) If a Credit Party is required to make a Tax Deduction, that Credit Party shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

          (v) Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Credit Party making that Tax Deduction shall deliver to the Administrative Agent for the Lender entitled to the payment a statement under section 975 of the U.K.’s Income Tax ▇▇▇ ▇▇▇▇ evidence reasonably satisfactory to that Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

          (vi) A Treaty Lender (to the extent it is legally entitled to), and each Credit Party which makes a payment to which that Treaty Lender is entitled, shall co-operate in completing any procedural formalities necessary for that Credit Party to obtain authorization to make that payment without a Tax Deduction.

          (vii) Any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to United States backup withholding or information reporting requirements.

          (b) Tax indemnity.

          (i) the Borrower shall (within ten Business Days of demand by the Administrative Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party

determines will be or has been suffered for or on account of Tax by that Protected Party in respect of a Credit Document.

          (ii) Paragraph (i) above shall not apply:

          (A) with respect to any Tax assessed on a Lender or Agent:

     (1) under the law of the jurisdiction in which that Lender or Agent is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Lender or Agent is treated as resident for tax purposes; or

     (2) under the law of the jurisdiction in which that Lender’s lending office is located in respect of amounts received or receivable in that jurisdiction,

     if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Agent or Lender; or

          (B) to the extent a loss, liability or cost:

     (1) is compensated for by an increased payment under Section 4.04(a); or

     (2) would have been compensated for by an increased payment under Section 4.04(a) but was not so compensated solely because one of the exclusions in paragraph (iv) of Section 4.04(a) applied.

(C) to the extent such loss, liability or cost arises after the Effective Date solely as a result of a voluntary act by the relevant Lender.

          (iii) A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Administrative Agent of the event which will give, or has given, rise to the claim, following which the Administrative Agent shall notify the Borrower.

          (iv) A Protected Party shall, on receiving a payment from a Credit Party under this Section 4.04(b), notify the Administrative Agent.

          (c) Tax Refund. If a Credit Party makes a Tax Payment and the relevant Lender or Agent determines that:

          (i) a Tax Refund is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and

          (ii) that Lender or Agent has obtained, utilized and retained that Tax Refund,

the Lender or Agent shall pay an amount to the Credit Party which that Lender or Agent reasonably determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Credit Party. Notwithstanding any provision in this Agreement or any other Credit Document, nothing in this Section 4.04 shall require a Lender or the Administrative Agent to disclose any confidential information to any Credit Party (including, without limitation, its tax returns or its calculations).

          (d) Stamp Taxes. The Borrower shall pay and, within three Business Days of demand, indemnify each Lender and each Agent against any cost, loss or liability that Lender or any

Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Credit Document.

          (e) VAT.

          (i) All amounts set out, or expressed in a Credit Document to be payable by any Credit Party to a Lender or Agent which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to paragraph (ii) below, if VAT is or becomes chargeable on any supply made by any Lender or Agent to any Credit Party under a Credit Document, that Credit Party shall pay to the Lender or Agent (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Lender or Agent shall promptly provide an appropriate VAT invoice to such Credit Party).

          (ii) If VAT is or becomes chargeable on any supply made by any Lender or Agent (the “Supplier”) to any other Lender or Agent (the “Recipient”) under a Credit Document, and any Credit Party other than the Recipient (the “Subject Party”) is required by the terms of any Credit Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Credit Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines in respect of such VAT.

          (iii) Where a Credit Document requires any Credit Party to reimburse or indemnify a Lender or Agent for any cost or expense, the Credit Party shall reimburse or indemnify (as the case may be) such Lender or Agent for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Lender or Agent reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

          (iv) Any reference in this Section 4.04(e) to any Credit Party shall, at any time when such Credit Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).

          (f) For the purposes of this Section 4.04, any reference to a U.K. statutory provision includes a reference to that provision as modified or replaced from time to time after the Effective Date.

          SECTION 5. Conditions Precedent to the Funding Date. The obligation of each Lender to make Term Loans on the Funding Date is subject at the time of the making of such Term Loans to the satisfaction of the following conditions:

          5.01. Effective Date; Notes. On or prior to the Funding Date, (a) the Effective Date shall have occurred as provided in Section 11.10 and (b) there shall have been delivered to the Administrative Agent for the account of each of the Lenders the appropriate Notes executed by the Borrower, in the amount, maturity and as otherwise provided herein.

          5.02. Officer’s Certificate. On the Funding Date, the Administrative Agent shall have received a certificate, dated the Funding Date and signed on behalf of the Borrower by the Chairman of the Board, the Chief Executive Officer, any Director, the President or any Vice President of the Borrower, certifying on behalf of the Borrower that all of the conditions in Sections 5.06 through 5.08, inclusive, and 5.16 have been satisfied on such date.

          5.03. Opinions of Counsel. On the Funding Date, the Administrative Agent shall have received (a) from ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special New York and Texas counsel to the Credit Parties, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date covering the matters set forth in Exhibit C-1 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, (b) from ▇▇▇▇▇▇▇▇ and Wedge, special Nevada counsel to Holdings, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date covering the matters set forth in Exhibit C-2 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, (c) from ▇▇▇▇▇ Dutilh, special Dutch counsel to the Agents, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date covering the matters set forth in Exhibit C-3 and such other matters incident to the transactions contemplated herein as the Administrative Agent shall reasonably request, (d) from White & Case LLP, special English counsel to the Agents, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date covering the matters set forth in Exhibit C-4 and such other matters incident to the transactions contemplated herein as the Administrative Agent shall reasonably request, and (e) from local counsel in each state in which a Mortgaged Property designated as such in Schedule 6.12(b) is located, an opinion in form and substance satisfactory to the Administrative Agent addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date covering such matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request.

          5.04. Company Documents; Proceedings; etc. (a) On the Funding Date, the Administrative Agent shall have received a certificate from each Credit Party, dated the Funding Date, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, any Managing Director, any Director, any Manager or the General Partner of such Credit Party and attested to by another officer of such Credit Party, in the form of Exhibit ▇-▇, ▇-▇ or D-3 (as appropriate given the jurisdiction of organization of such Credit Party) with appropriate insertions, together with copies of the certificate or articles of incorporation, by-laws, deed of incorporation, up-to-date trade register excerpt (or other equivalent organizational documents), as applicable, of such Credit Party and the resolutions and, as applicable, shareholder consents of such Credit Party referred to in such certificate, and each of the foregoing shall be in form and substance acceptable to the Administrative Agent.

          (b) On or prior to the Funding Date, the Administrative Agent shall have received all records of Business proceedings, governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Administrative Agent reasonably may have requested such documents and papers where appropriate to be certified by proper Business or Governmental Authorities.

          5.05. Employee Benefit Plans; Shareholders’ Agreements; Management Agreements; Employment Agreements; Collective Bargaining Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements; Project Documents. On or prior to the Funding Date, there shall have been made available to the Administrative Agent true and correct copies of the following documents:

     (a) all Plans (and for each Plan that is required to file an annual report on Internal Revenue Service Form 5500-series, a copy of the most recent such report (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information), and for each Plan that is a “single-employer plan” as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial valuation therefor) and any other “employee benefit plans” as defined in Section 3(3) of ERISA, and any other material agreements, plans or arrangements, sponsored, maintained, or

contributed to by (or to which there is an obligation to contribute of) Holdings, any of its Subsidiaries, or any ERISA Affiliate for the benefit of current or former employees of Holdings or any of its Subsidiaries or any ERISA Affiliate (provided that the foregoing shall apply in the case of any Multiemployer Plan, only to the extent that any document described herein is in the possession of Holdings, and/or any ERISA Affiliate or is reasonably available thereto from the sponsor or trustee of any such plan) (collectively, the “Employee Benefit Plans”);

     (b) all agreements entered into by Holdings or any of its Subsidiaries governing the terms and relative rights of its Equity Interests and any agreements entered into by its shareholders relating to any such entity with respect to its Equity Interests (collectively, the “Shareholders’ Agreements”);

     (c) all material agreements with members of, or with respect to, the management of Holdings or any of its Subsidiaries other than employee agreements not addressing the management of Holdings and its Subsidiaries (collectively, the “Management Agreements”);

     (d) all material employment agreements entered into by Holdings or any of its Subsidiaries and in effect on the Funding Date (collectively, the “Employment Agreements”);

     (e) all collective bargaining agreements applying or relating to any employee of Holdings or any of any of its Subsidiaries (collectively, the “Collective Bargaining Agreements”);

     (f) all tax sharing, tax allocation and other similar agreements entered into by Holdings or any of its Subsidiaries (collectively, the “Tax Sharing Agreements”);

     (g) all non-compete agreements entered into by Holdings or any of its Subsidiaries which restrict the activities of Holdings or any of its Subsidiaries (collectively, the “Non-Compete Agreements”);

     (h) all agreements evidencing or relating to any individual item of Indebtedness of Holdings or any of its Subsidiaries in a principal amount in excess of $5,000,000 which is to remain outstanding after giving effect to the Funding Date (the “Existing Indebtedness Agreements”); and

     (i) all Project Documents.

all of which Employee Benefit Plans, Shareholders’ Agreements, Management Agreements, Employment Agreements, Collective Bargaining Agreements, Tax Sharing Agreements, Non-Compete Agreements, Existing Indebtedness Agreements and Project Documents shall be in form and substance reasonably satisfactory to the Administrative Agent and shall be in full force and effect on the Funding Date (except Plans that are not currently in effect but to which Holdings, any of its Subsidiaries, or any ERISA Affiliates contributed (or had an obligation to contribute) during the five-year period preceding the Funding Date).

Notwithstanding anything to the contrary contained above in this Section 5.05, the requirements with respect to the delivery (and certification) of agreements and documents described in this Section 5.05 shall be deemed satisfied to the extent such agreements and documents have been publicly filed by Holdings with the SEC.

          5.06. Consummation of the Refinancing. (a) On the Funding Date (contemporaneously with the making of the Term Loans on such date), all Indebtedness of Holdings and its Subsidiaries under the Existing Credit Agreements and all documentation related thereto shall have

been repaid in full, together with all fees and other amounts owing thereon, all commitments thereunder shall have been terminated and all letters of credit issued pursuant thereto shall have been terminated or cash collateralized in a manner satisfactory to the Administrative Agent.

          (b) On the Funding Date (contemporaneously with the making of Term Loans on such date), all security interests in respect of, and Liens securing, the Indebtedness under the Existing Credit Agreements created pursuant to the security documentation relating thereto shall have been terminated and released, and the Collateral Agent shall have received all such releases as may have been requested by the Collateral Agent, which releases shall be in form and substance satisfactory to the Collateral Agent. Without limiting the foregoing, there shall have been delivered to the Collateral Agent (i) proper termination or discharge of debt statements and/or forms (Form UCC-3 or the appropriate equivalent in each relevant jurisdiction) for filing under the UCC or equivalent statute or regulation of each relevant jurisdiction where a financing statement or application for registration (Form UCC-1 or the appropriate equivalent in each relevant jurisdiction) was filed with respect to Holdings or any of its Subsidiaries in connection with the security interests created with respect to the Existing Credit Agreements, (ii) terminations, releases or reassignments of any security interest in, or Lien on, any patents, trademarks, copyrights, or similar interests of Holdings or any of its Subsidiaries on which filings have been made and (iii) terminations of all mortgages, leasehold mortgages, hypothecs, charges, pledges, assignments, deeds of trust or equivalent local security or Liens created with respect to property of Holdings or any of its Subsidiaries, in each case, to secure the obligations under the Existing Credit Agreements, all of which shall be in form and substance satisfactory to the Administrative Agent.

          (c) On the Funding Date and after giving effect to the consummation of the Transaction, Holdings and its Subsidiaries shall have no outstanding Preferred Equity Interests or Indebtedness, except for (i) Indebtedness pursuant to or in respect of the Credit Documents and (ii) certain other indebtedness and Preferred Equity Interests existing on the Effective Date as listed on Schedule 6.20 hereto (with the Indebtedness described in this sub-clause (ii) being herein called the “Existing Indebtedness”). On and as of the Funding Date, all of the Existing Indebtedness shall remain outstanding after giving effect to the Transaction without any breach, required repayment, required offer to purchase, default, event of default or termination rights existing thereunder or arising as a result of the Transaction.

          (d) The Administrative Agent shall have received evidence in form, scope and substance satisfactory to it that the matters set forth in this Section 5.06 have been satisfied on the Funding Date, including, without limitation, acceptable payoff letters and releases, terminations and such other documents as the Administrative Agent may reasonably request, each in form and substance reasonably satisfactory to the Administrative Agent.

          5.07. Adverse Change, Approvals. (a) Since December 31, 2009, nothing shall have occurred (and neither the Administrative Agent nor any Lender shall have become aware of any facts or conditions not previously known) which has had, or could reasonably be expected to have, a Material Adverse Effect.

          (b) On or prior to the Funding Date, all necessary governmental (domestic and foreign) and material third party approvals and/or consents in connection with the Transaction, the other transactions contemplated hereby and the granting of Liens under the Credit Documents shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transactions, the other transactions contemplated by the Credit Documents or otherwise referred to herein or therein. On the Funding Date, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking

injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the Transactions.

          5.08. Litigation. On the Funding Date, there shall be no actions, suits or proceedings pending or threatened (a) with respect to the Transaction, this Agreement or any other Credit Documents or (b) which has had, or could reasonably be expected to have, a Material Adverse Effect.

          5.09. Guaranties and Security Documents. On the Funding Date:

          (a) each Subsidiary Guarantor shall have duly authorized, executed and delivered a Subsidiaries Guaranty in the form of Exhibit E (as amended, modified, restated and/or supplemented from time to time, the “Subsidiaries Guaranty”);

          (b) each Credit Party party thereto shall have duly authorized, executed and delivered a U.S. Security Agreement in the form of Exhibit F-1 (as amended, modified, restated and/or supplemented from time to time, the “U.S. Security Agreement”) and, in connection therewith, the Credit Parties shall have delivered to the Collateral Agent:

     (i) all of the Collateral consisting of certificated securities and promissory notes, if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in the case of any such promissory notes and (y) together with executed and undated endorsements for transfer in the case of any such certificated securities;

     (ii) proper financing statements (Form UCC-1 or the equivalent) fully executed or authorized for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the U.S. Security Agreement;

     (iii) copies of requests for information or copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name any Credit Party as debtor and that are filed where each Credit Party is organized and, to the extent requested by the Collateral Agent, in such other jurisdictions in which Collateral is located on the Funding Date, together with copies of such other financing statements that name Holdings or any of its Subsidiaries as debtor (none of which shall cover any of the Collateral except (x) to the extent evidencing Permitted Liens or (y) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed or authorized for filing);

     (iv) evidence of the completion (or arrangements therefor satisfactory to the Collateral Agent) of all other recordings and filings of, or with respect to, and all action necessary in connection with, the U.S. Security Agreement as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security interests intended to be created by the U.S. Security Agreement; and

     (v) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the U.S. Security Agreement have been taken;

          (c) each Credit Party party thereto shall have duly authorized, executed and delivered a English Debenture in the form of Exhibit F-2 (as amended, modified, restated and/or supplemented from time to time the “English Debenture”) and, in connection therewith, the Credit Parties shall have delivered to the Collateral Agent:

     (i) copies of lien searches with respect to the each such Credit Party;

     (ii) evidence of the completion (or arrangements therefor satisfactory to the Collateral Agent) of all other recordings and filings of, or with respect to, and all action necessary in connection with, the English Debenture as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security interests intended to be created by the English Debenture; and

     (iii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the English Debenture have been taken;

          (d) each Credit Party party thereto shall have duly authorized, executed and delivered a English Charge Over Shares in the form of Exhibit F-3 (as amended, modified, restated and/or supplemented from time to time, the “English Charge Over Shares”) and, in connection therewith, such Credit Parties shall have delivered to the Collateral Agent:

     (i) all of the Collateral consisting of certificated securities referred to therein and then owned by such Credit Party, together with executed and undated endorsements for transfer in the case of any such certificated securities;

     (ii) evidence of the completion (or arrangements therefor satisfactory to the Collateral Agent) of all other recordings and filings of, or with respect to, and all action necessary in connection with, the English Charge Over Shares as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security interests intended to be created by the English Charge Over Shares; and

     (iii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the English Charge Over Shares have been taken;

          (e) each Credit Party party thereto shall have duly authorized, executed and delivered a Dutch Pledge Agreement in the form of Exhibit F-4 (as amended, modified, restated and/or supplemented from time to time, the “Dutch Pledge Agreement”) and, in connection therewith, such Credit Parties shall have delivered to the Collateral Agent:

     (i) all of the Collateral consisting of certificated securities and promissory notes, if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in the case of any such promissory notes and (y) together with executed and undated endorsements for transfer in the case of any such certificated securities;

     (ii) evidence of the completion (or arrangements therefor satisfactory to the Collateral Agent) of all other recordings and filings of, or with respect to, and all action necessary in connection with, the Dutch Pledge Agreement as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security interests intended to be created by the Dutch Pledge Agreement; and

     (iii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Dutch Pledge Agreement have been taken;

          (f) each Credit Party party thereto shall have duly authorized, executed and delivered a Scottish Security in the form of Exhibit F-5 (as amended, modified or supplemented from time to time, the “Scottish Security”) and in connection therewith, such Credit Parties shall have delivered to the Collateral Agent;

     (i) evidence of the completion (or arrangements therefor satisfactory to the Collateral Agent) of all other recordings and filings of, or with respect to, and all action necessary in connection with, the Scottish Security as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security interests intended to be created by the Scottish Security; and

     (ii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Scottish Security have been taken;

          (g) the Administrative Agent shall have received control agreements duly executed by each applicable Credit Party, the applicable bank and the Collateral Agent with respect to each deposit or similar account of each Credit Party set forth on Schedule 5.09(g), such control agreements in form and substance reasonably satisfactory to the Collateral Agent; and

          (h) each applicable Credit Party shall have delivered to the Collateral Agent:

     (i) fully executed counterparts of Mortgages and corresponding UCC fixture filings, in form and substance reasonably satisfactory to the Collateral Agent, which Mortgages and UCC fixture filings shall cover each Oil and Gas Property owned or leased by Holdings or any of its Subsidiaries and designated as a “Mortgaged Property” on Schedule 6.12(b) hereto, together with evidence that counterparts of such Mortgages and UCC fixture filings have been delivered to the title insurance company insuring the Lien of such Mortgage for recording;

     (ii) a description of each such Mortgaged Property; and

     (iii) evidence reasonably satisfactory to the Collateral Agent that the Mortgages together with the other Security Documents when duly filed, registered and/or recorded will create first priority/perfected Liens on the Mortgaged Properties.

          5.10. [Reserved].

          5.11. Financial Statements; Pro Forma Balance Sheet; Projections etc(a) . On or prior to the Funding Date, the Administrative Agent shall have received true and correct copies of the historical financial statements, the pro forma financial statements and the Projections referred to in Sections 6.05(a), (b) and (e), which historical financial statements, pro forma financial statements and Projections shall be in form and substance satisfactory to the Administrative Agent and the Required Lenders.

          5.12. Solvency Certificate; Insurance Certificates. On the Funding Date, the Administrative Agent shall have received:

     (i) a solvency certificate from the chief financial officer of Holdings in the form of Exhibit G; and

     (ii) certificates of insurance complying with the requirements of Section 7.03 for the business and properties of Holdings and its Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and naming the Collateral Agent as an additional insured

and/or as loss payee, as applicable, and stating that such insurance shall not be canceled without at least 30 days’ prior written notice by the insurer to the Collateral Agent.

          5.13. Reserve Report; Qualifications. The Administrative Agent shall have received prior to the Funding Date an annual Reserve Report (as described in the definition of such term) for the fiscal year ended December 31, 2009.

          5.14. Fees, etc. On the Funding Date, the Borrower shall have paid to the Administrative Agent (and its relevant affiliates) and the Collateral Agent all costs, fees and expenses (including, without limitation, legal fees and expenses) and other compensation contemplated hereby payable to the Administrative Agent (and/or its relevant affiliates) and the Collateral Agent to the extent then due.

          5.15. Syndication Letter. On or prior to the Funding Date, the Borrower shall have executed and delivered the Syndication Letter, which shall be in form and substance satisfactory to the Administrative Agent, and the Syndication Letter shall be in full force and effect.

          5.16. No Default; Representations and Warranties. On the Funding Date, (a) there shall exist no Default or Event of Default and (b) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on such date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

          5.17. Notice of Borrowing. Prior to the Funding Date, the Administrative Agent shall have received the Notice of Borrowing meeting the requirements of Section 2.02(a).

          5.18. Patriot Act; Know Your Customer. Prior to the Funding Date, the Lenders shall have received from the Credit Parties, to the extent requested by the Lenders or the Administrative Agent, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

          5.19. Service of Process. On or prior to the Funding Date, the Administrative Agent shall have received evidence satisfactory to it that (a) each Credit Party has appointed CT Corporation as agent for service of process as contemplated in Section 11.18(a) and (b) CT Corporation has accepted its appointment.

          5.20. U.K. Service of Process. On or prior to the Funding Date, the Administrative Agent shall have received evidence satisfactory to it that (a) each Credit Party that is not incorporated in England and Wales and that has executed, or will on the Funding Date execute, any Credit Document governed by the laws of England and Wales has irrevocably appointed the Borrower as agent for service of process as contemplated in Section 11.18(b) and (b) the Borrower has accepted its appointment.

          In determining the satisfaction of the conditions specified in this Section 5, (a) to the extent any item is required to be satisfactory to any Lender, such item shall be deemed satisfactory to each Lender unless such Lender has notified the Administrative Agent in writing prior to the occurrence of the Funding Date that the respective item or matter does not meet its satisfaction and (b) in determining whether any Lender is aware of any fact, condition or event that has occurred and which would reasonably be expected to have a Material Adverse Effect or a material adverse effect of the type described in Section 5.07, each Lender which has not notified the Administrative Agent in writing prior to the occurrence of the Funding Date of such fact, condition or event shall be deemed not to be aware of any such fact, condition or event on the Funding Date. Upon the Administrative Agent’s good faith

determination that the conditions specified in this Section 5 have been met (after giving effect to the preceding sentence), then the Funding Date shall have been deemed to have occurred, regardless of any subsequent determination that one or more of the conditions thereto had not been met (although the occurrence of the Funding Date shall not release the Borrower from any liability for failure to satisfy one or more of the applicable conditions contained in this Section 5).

          SECTION 6. Representations, Warranties and Agreements. In order to induce the Lenders to enter into this Agreement and to make Term Loans, the Borrower makes the following representations, warranties and agreements, in each case after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Term Loans on the Funding Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Funding Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

          6.01. Company Status. Each of Holdings and each of its Subsidiaries (a) is a duly organized and validly existing Business in good standing (or, in the case of any Non-U.S. Subsidiary of Holdings, the applicable equivalent of “good standing” to the extent that such concept exists in such Non-U.S. Subsidiary’s jurisdiction of organization) under the laws of the jurisdiction of its organization, (b) has the Business power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (c) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications except for failures to be so qualified or authorized which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. No certifications by any Governmental Authority are required for operation of the business of Holdings and its Subsidiaries that are not in place, except for such certifications or agreements, the absence of which could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

          6.02. Power and Authority. Each Credit Party has the Business power and authority to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary Business action to authorize the execution, delivery and performance by it of each of such Credit Documents. Each Credit Party has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

          6.03. No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (a) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or Governmental Authority, (b) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of any Credit Party or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which any Credit Party or any of its Subsidiaries is a party or by which it or any its property or assets is bound or to which it may be subject, or (c) will violate any provision of the certificate or articles of incorporation, certificate of formation,

limited liability company agreement or by-laws (or equivalent constitutional, organizational and/or formation documents), as applicable, of any Credit Party or any of its Subsidiaries.

          6.04. Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except (a) for those that have otherwise been obtained or made on or prior to the Funding Date and which remain in full force and effect on the Funding Date and, (b) filings which are necessary to perfect the security interests created or intended to be created under the Security Documents, which filings will be made within ten days following the Funding Date), or exemption by, any Governmental Authority is required to be obtained or made by, or on behalf of, any Credit Party to authorize, or is required to be obtained or made by, or on behalf of, any Credit Party in connection with, (i) the execution, delivery and performance of any Credit Document or (ii) the legality, validity, binding effect or enforceability of any such Credit Document.

          6.05. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections. (a) (i) The audited consolidated balance sheet of Holdings at December 31, 2007, December 31, 2008 and December 31, 2009 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of Holdings for the fiscal years of Holdings ended on such dates, in each case furnished to the Lenders prior to the Funding Date, present fairly in all material respects the consolidated financial position of Holdings at the date of said financial statements and the results for the respective periods covered thereby and (ii) the unaudited consolidated balance sheet of Holdings at June 30, 2010 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of Holdings for the six-month period ended on such date, furnished to the Lenders prior to the Funding Date, present fairly in all material respects the consolidated financial position of Holdings at the date of said financial statements and the results for the respective periods covered thereby, subject to normal year-end adjustments. All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements (and except for the absence of footnotes in interim financial statements).

          (b) (i) The pro forma consolidated balance sheet of Holdings as at June 30, 2010 (after giving effect to the Transaction) and (ii) the pro forma income statement of Holdings for the six-month period ended June 30, 2010 (after giving effect to the Transaction and the financing therefor), copies of which have been furnished to the Lenders prior to the Funding Date, present good faith estimates of the pro forma consolidated financial position of Holdings as of such date and the consolidated results of operations of Holdings for such six-month period, as the case may be.

          (c) On and as of the Funding Date, and after giving effect to the Transaction and to all Indebtedness being incurred or assumed and Term Loans created by the Credit Parties in connection therewith on such date, (i) the sum of the fair value of the assets, at a fair valuation, of the Credit Parties and their Subsidiaries (taken as a whole) will exceed their debts (taken as a whole), (ii) the sum of the present fair salable value of the assets of the Credit Parties and their Subsidiaries (taken as a whole) will exceed their debts (taken as a whole), (iii) the Credit Parties and their Subsidiaries (taken as a whole) have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their ability to pay such debts as such debts mature, and (iv) the Credit Parties and their Subsidiaries (taken as a whole) will have sufficient capital with which to conduct their businesses. For purposes of this Section 6.05(c), “debt” means any liability on a claim, and “claim” means (A) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (B) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the

light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

          (d) Except as disclosed in the financial statements delivered pursuant to Section 6.05(a), and except for the Indebtedness incurred and/or outstanding under this Agreement, there were as of the Funding Date no liabilities or obligations with respect to Holdings or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. As of the Funding Date, neither Holdings nor the Borrower knows of any basis for the assertion against it or any of its Subsidiaries of any liability or obligation of any nature whatsoever that is not disclosed in such financial statements delivered pursuant to Section 6.05(a) or (b) or referred to in the immediately preceding sentence which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

          (e) The Projections delivered to the Administrative Agent and the Lenders prior to the Funding Date have been prepared in good faith and are based on assumptions believed to be reasonable at the time made, and as of the Funding Date, and there are no statements or conclusions in the Projections which are based upon or include information known to the Borrower to be misleading in any material respect or which fail to take into account material information known to Holdings or the Borrower regarding the matters reported therein. On the Funding Date, each of Holdings and the Borrower believes that the Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ materially from the projected results.

          (f) After giving effect to the Transaction, since December 31, 2009, nothing has occurred that has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

          6.06. Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Holdings or the Borrower, threatened (a) with respect to the Transaction or any Credit Document or (b) that has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

          6.07. True and Complete Disclosure. All factual information (taken as a whole) furnished by or on behalf of Holdings or the Borrower to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of Holdings or the Borrower in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided, it being understood and agreed that for purposes of this Section 6.07, such factual information shall not include the Projections or any pro forma financial information.

          6.08. Use of Proceeds; Margin Regulations. (a) All proceeds of the Term Loans shall be used (i) to fund the Refinancing, (ii) to pay fees and expenses incurred in connection with the Transaction and (iii) for Holdings’ and its Subsidiaries general corporate purposes, including without limitation, to cash collateralize letters of credit issued for the account of Holdings or any of its Subsidiaries and to fund Capital Expenditures.

          (b) No part of the proceeds of any Term Loan will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Term Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation T, U or X.

          6.09. Tax Returns and Payments. Each of Holdings and each of its Subsidiaries has timely filed or caused to be timely filed with the appropriate taxing authority all Federal, state and material local returns, statements, forms and reports for taxes (the “Returns”) required to be filed by, or with respect to the income, properties or operations of, Holdings and/or any of its Subsidiaries. The Returns accurately reflect in all material respects all liability for taxes of Holdings and its Subsidiaries, as applicable, for the periods covered thereby. Each of Holdings and each of its Subsidiaries has paid all taxes and assessments payable by it which have become due, other than (a) those that are being contested in good faith and adequately disclosed and for which adequate reserves have been established in accordance with GAAP and (b) immaterial amounts of taxes or assessments that Holdings and its Subsidiaries are not aware are due; provided that upon Holdings or such Subsidiary becoming aware that such taxes and assessments are due, such Person shall promptly pay all such taxes and assessments, together with any interest and additional charges thereon. There is no action, suit, proceeding, investigation, audit or claim now pending or, to the knowledge of Holdings or the Borrower, threatened (in writing) by any authority regarding any taxes relating to Holdings or any of its Subsidiaries. As of the Funding Date, neither Holdings nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of Holdings or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of Holdings or any of its Subsidiaries not to be subject to the normally applicable statute of limitations. Neither Holdings nor any of its Subsidiaries has incurred, nor will any of them incur, any material tax liability in connection with the Transaction or any other transactions contemplated hereby (it being understood that the representation contained in this sentence does not cover any future tax liabilities of Holdings or any of its Subsidiaries arising as a result of the operation of their businesses in the ordinary course of business) or any tax liability resulting from indemnification (or yield protection provisions) under this Agreement).

          6.10. Compliance with ERISA. (a) Schedule 6.10(a) hereto sets forth each Plan as of the date of this Agreement. Each Plan (and each related trust, insurance contract or fund) is in substantial compliance with its terms and with all applicable laws, including without limitation ERISA and the Code; each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service (or has submitted, or is within the remedial amendment period for submitting, an application for a determination letter with the Internal Revenue Service, and is awaiting receipt of a response) to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code or is comprised of a master or prototype plan that has received a favorable opinion letter from the Internal Revenue Service; or a volume submitter plan that has received a favorable advisory letter from the Internal Revenue Service; no Reportable Event has occurred; no Employee Benefit Plan is a Multiemployer Plan; no Plan has an Unfunded Current Liability that could reasonably be expected to result in a material liability; no ERISA Event has occurred, or is reasonably expected to occur, with respect to any Plan; all contributions required to be made with respect to a Plan have been timely made or have been reflected on the most recent consolidated balance sheet filed prior to the date hereof or accrued in the accounting records of Holdings and its Subsidiaries; no action, suit, proceeding, hearing, or audit or investigation by a Governmental Authority with respect to the administration, operation or the investment of assets of any Plan (other than routine claims and appeals for benefits) is pending, expected or threatened that is reasonably expected to result in a material liability to Holdings or any of its Subsidiaries; no Multiemployer Plan that is subject to Section 412 of the Code or Section 302 of ERISA has applied for or received an extension of any amortization period, within the meaning of Section 431(d) of the Code or Section 304(d) of ERISA; Holdings, any of its Subsidiaries

and any ERISA Affiliate have not withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Plan subject to Section 4064(a) of ERISA that has terminated and to which it made contributions at any time within the five Plan years preceding the date of termination; none of Holdings, any of its Subsidiaries or any ERISA Affiliate have incurred or reasonably expect to incur any liability to the PBGC except for any liability for premiums due in the ordinary course or other liability which could not reasonably be expected to result in material liability, and no lien imposed under the Code or ERISA on the assets of Holdings or any of its Subsidiaries or any ERISA Affiliate exists or is expected to arise on account of any Plan; none of Holdings, any of its Subsidiaries or any ERISA Affiliate has incurred, or is expected to incur, any liability under Section 4069 or 4212(c) of ERISA; each Employee Benefit Plan that is a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) has at all times been operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, except to the extent that any non-compliance with any such provisions could not reasonably be expected to result in a material liability to Holdings or any of its Subsidiaries; each Employee Benefit Plain that is group health plan (as defined in 45 Code of Federal Regulations Section 160.103) has at all times been operated in compliance with the provisions of the Health Insurance Portability and Accountability Act of 1996 and the regulations promulgated thereunder, except to the extent that any non-compliance with such provisions and regulations could not reasonably be expected to result in a material liability to Holdings or any of its Subsidiaries; no lien imposed under the Code or ERISA on the assets of Holdings, any of its Subsidiaries or any ERISA Affiliate exists or is expected to arise on account of any Plan; and Holdings and its Subsidiaries may amend any Plan sponsored by any of them (other than a defined benefit plan) to cease contributions thereunder and may terminate any Plan sponsored by any of them without, in each case, incurring any material liability (other than ordinary administrative termination costs that are immaterial in nature);

          Subject to Section 6.10(b), each Non-U.S. Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Non-U.S. Pension Plan have been timely made. Neither Holdings nor any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Non-U.S. Pension Plan (other than a defined contribution plan). The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Pension Plan (other than a Non-U.S. Pension Plan that (i) is not required to be funded under applicable law or (ii) is a defined contribution plan), determined as of the end of Holdings’ most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Non-U.S. Pension Plan allocable to such benefit liabilities by an amount that could reasonably be expected to have a Material Adverse Effect.

          (b) Without limiting the effect of preceding clause (a), neither Holdings nor any of its Subsidiaries is or has at any time been, within the United Kingdom, an employer (for the purposes of sections 38 to 51 of the United Kingdom’s Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the United Kingdom’s Pension Schemes Act 1993) or has at any time been “connected” with or an “associate” of (as those terms are used in sections 38 and 43 of the United Kingdom’s Pensions Act 2004) such an employer.

          6.11. Security Documents. (a) The provisions of each Security Document (other than the Mortgages which are addressed in Section 6.11(b)) are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable security interest of the type that it purports to create in all right, title and interest of the Credit Parties in the Collateral described therein, and the Collateral Agent, for the benefit of the Secured Creditors, has (or upon filing of UCC financing statements and other required filings registrations or notices or taking of possession or control

(which shall occur within 10 days following the Funding Date) will have) a fully perfected security interest in all right, title and interest in all of the Collateral described therein, subject to no other Liens other than Permitted Liens; provided that (i) the Borrower shall not be deemed to represent pursuant to the foregoing that the U.S. Security Agreement creates a legal, valid and enforceable security interest in (1) the Equity Interests of Endeavour Energy Luxembourg S.a.r.l. or of Endeavour Energy New Ventures I, Ltd. or (2) any Collateral (as defined in the U.S. Security Agreement) granted by any Grantor (as defined in the U.S. Security Agreement) that is not organized under the laws of the United States or any state thereof (other than Equity Interests held by any such Grantor in any Person that is organized under the laws of the United States or any state thereof), and (ii) no steps have been taken in order to perfect any such security interest in the Equity Interests referred to in clause (i)(1) above or the Collateral referred to in clause (i)(2) (other than Equity Interests held by any such Grantor in any Person that is organized under the laws of the United States or any state thereof), in each case granted pursuant to the U.S. Security Agreement. The recordation of (i) the grant of security interest in U.S. Patents and (ii) the grant of security interest in U.S. Trademarks in the respective form attached to the U.S. Security Agreement, in each case in the United States Patent and Trademark Office, together with filings on Form UCC-1 made pursuant to the U.S. Security Agreement, will create, to the extent as may be perfected by such filings and recordation, a perfected security interest in the United States trademarks and patents covered by the U.S. Security Agreement, and the recordation of the grant of security interest in U.S. Copyrights in the form attached to the U.S. Security Agreement with the United States Copyright Office, together with filings on Form UCC-1 made pursuant to the U.S. Security Agreement, will create, to the extent as may be perfected by such filings and recordation, a perfected security interest in the United States copyrights covered by the U.S. Security Agreement.

          (b) Upon filing or recording, as applicable, with the appropriate recording office, each Mortgage shall create, as security for the obligations purported to be secured thereby, a valid and enforceable perfected first priority security interest in and mortgage lien on the respective Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors, subject to no other Liens other than Permitted Liens.

          6.12. Properties. (a) All Real Property (other than Oil and Gas Properties) leased by Holdings or any of its Subsidiaries as of the Funding Date, and the nature of the interest therein, is set forth in Schedule 6.12(a) hereto. Each of Holdings and each of its Subsidiaries has a valid and indefeasible leasehold interest in the material properties set forth in Schedule 6.12(a) free and clear of all Liens other than Permitted Liens. As of the Funding Date, none of Holdings or any of its Subsidiaries owns any Real Property other than Oil and Gas Properties.

          (b) All Oil and Gas Properties owned or leased by Holdings or any of its Subsidiaries as of the Funding Date (other than Oil and Gas Properties which (i) are not developed, (ii) have no reserves or (iii) in which none of Holdings or any of its Subsidiaries have any material working interests) are reflected in the Reserve Report as of December 31, 2009 or are otherwise set forth in Schedule 6.12(b).

          (c) Each of Holdings and each of its Subsidiaries, as applicable, has good and defensible (from the perspective of a reasonably prudent investor in the Oil and Gas Business) title to all of the Oil and Gas Properties included in the most recent Reserve Report delivered pursuant to Section 5.13 or 7.01(d), as the case may be, free from all Liens, claims and title imperfections, except for (i) such imperfections of title as do not in the aggregate detract from the value thereof to, or the use thereof in, the business of Holdings and its Subsidiaries in any material respect, (ii) Oil and Gas Properties disposed of since the date of the most recent Reserve Report as permitted by Section 8.02, and (iii) Liens expressly permitted by Section 8.01. The quantum and nature of the interest of Holdings and each of its Subsidiaries in and to the Oil and Gas Properties as set forth in each Reserve Report includes or will

include the entire interest of Holdings and each of its Subsidiaries in such Oil and Gas Properties as of the date of such Reserve Report and are or will be complete and accurate in all material respects as of the date of such Reserve Report; and there are no “back-in” or “reversionary” interests held by third parties which could reduce the interest (working, net revenue or otherwise) of Holdings and its Subsidiaries in such Oil and Gas Properties in any material respect, except as expressly set forth or given effect to in such Reserve Report. Except for obligations to contribute a proportionate share of the costs of defaulting or non-consenting co-owners or as otherwise expressly set forth in the most recent Reserve Report, neither Holdings nor any Subsidiary is obligated to bear any percentage share of the costs and expenses relating to the drilling, development and production of the Oil and Gas Properties in excess of its working interests.

          (d) Holdings and each of its Subsidiaries has complied with all obligations under all licenses, leases, subleases and term mineral interests in their respective Oil and Gas Properties and all such licenses, leases, subleases and term mineral interests are valid, subsisting and in full force and effect, and neither Holdings nor any of its Subsidiaries has knowledge that a default exists under any of the terms or provisions, express or implied, of any of such licenses, leases, subleases or interests or under any agreement to which the same are subject, except to the extent any inaccuracy in the foregoing could not reasonably be expected to result in a Material Adverse Effect. All of the Oil and Gas Contracts and obligations of Holdings and each of its Subsidiaries that relate to the Oil and Gas Properties are in full force and effect and constitute legal, valid and binding obligations of Holdings and its Subsidiaries party thereto, except to the extent any inaccuracy in the foregoing could not reasonably be expected to result in a Material Adverse Effect. None of Holdings or any of its Subsidiaries or, to the knowledge of Holdings or its Subsidiaries, any other party to any licenses, leases, subleases or term mineral interests in the Oil and Gas Properties or any Oil and Gas Contract (i) is in breach of or default, or with the lapse of time or the giving of notice, or both, would be in breach or default, with respect to any obligations thereunder, whether express or implied, except such that could not reasonably be expected to result in a Material Adverse Effect or (ii) has given or threatened to give notice of any default under or inquiry into any possible default under, or action to alter, terminate, rescind or procure a judicial reformation of, any licenses or lease in the Oil and Gas Properties or any Oil and Gas Contract. Holdings and each of its Subsidiaries enjoys peaceful and undisturbed possession under all such licenses, leases, subleases and term mineral interests.

          (e) Holdings and each of its Subsidiaries has complied with all obligations under all Authorizations, and to the best knowledge of Holdings and the Borrower, no steps have been taken for the revocation, variation or refusal of any Authorization, except to the extent any non-compliance with such obligations or any such revocation, variation or refusal could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

          6.13. Capitalization. On and as of the Funding Date, (a) the authorized capital stock of Holdings consists of (i) 450,000,000 shares of common stock $.001 par value per share (such authorized shares of common stock, together with any subsequently authorized shares of common stock of Holdings, “Holdings Common Stock”) and (ii) 10,000,000 shares of preferred stock $.001 par value and (b) the authorized capital stock of the Borrower consists of 10,000 ordinary shares of common stock, £0.10 par value per ordinary share. The outstanding Equity Interests of each Credit Party have been duly authorized and validly issued (to the extent applicable) and have been issued free of preemptive rights and each Person listed on Schedule 6.13 hereto as of the Funding Date owns beneficially and of record all of the Equity Interests it is listed as owning free and clear of any Liens (other than Permitted Liens). As of the Funding Date, except as set forth or Schedule 6.13, no Credit Party has outstanding any securities convertible into or exchangeable for its respective Equity Interests or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreement providing for the issuance

(contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its Equity Interests or any equity-related appreciation or similar rights.

          6.14. Subsidiaries. On and as of the Funding Date, Holdings has no Subsidiaries other than those Subsidiaries listed on Schedule 6.14 hereto. Schedule 6.14 sets forth, as of the Funding Date, the percentage ownership (direct and indirect) of Holdings in each class of capital stock or other Equity Interests of each of its Subsidiaries and also identifies the direct owner thereof. All outstanding shares of Equity Interests of each Subsidiary of Holdings have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. Other than as set forth on Schedule 6.14, no Subsidiary of Holdings has outstanding any securities convertible into or exchangeable for its Equity Interests or outstanding any right to subscribe for or to purchase, or any options or warrants for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any character relating to, its Equity Interests or any appreciation or similar rights. On the Funding Date, 100% of the Equity Interests of each Credit Party are owned directly or indirectly by Holdings.

          6.15. Compliance with Statutes, etc. (a) Each of Holdings and each of its Subsidiaries is qualified under and is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, and has obtained all required Authorizations from, all Governmental Authorities in respect of the conduct of its business and the ownership of its property (including statutes, regulations, orders and restrictions applicable to the Oil and Gas Business and applicable statutes, regulations, orders and restrictions relating to environmental standards and controls, except such statutes, regulations, orders and restrictions that are expressly addressed in Section 6.17), except such non-compliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (b) Each of Holdings and each of its Subsidiaries is in compliance with all bonding requirements for the ownership and operation of its Oil and Gas Properties.

          6.16. Investment Company Act. Neither Holdings nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

          6.17. Environmental Matters. Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (a) each of Holdings and each of its Subsidiaries is in compliance with all applicable Environmental Laws and, with respect to its current operations, has obtained and is in compliance with all permits required of it under Environmental Law, and there are no proceedings pending or, to the knowledge of Holdings or the Borrower, threatened to revoke or rescind any such permit; (b) there are no claims, proceedings, investigations or notices of violation pending or, to the knowledge of Holdings or the Borrower, threatened against Holdings or any of its Subsidiaries under any Environmental Law; (c) no Lien, other than a Permitted Lien, has been recorded or, to the knowledge of Holdings or the Borrower, threatened under any Environmental Law with respect to any Real Property currently owned by Holdings or any of its Subsidiaries; (d) neither Holdings nor any of its Subsidiaries has contracted to assume or accept responsibility for any liability of any non-affiliated Person under any Environmental Law; and (e) there are no facts, circumstances, conditions or occurrences with respect to the past or present business or operations of Holdings, any of its Subsidiaries or any of their respective predecessors, or any Real Property or facility at any time owned, leased or operated by Holdings, any of its Subsidiaries or any of their respective predecessors, that could be reasonably expected to give rise to any claim, proceeding, investigation, action or liability of or against Holdings or any of its Subsidiaries under any Environmental Law.

          6.18. Employment and Labor Relations. (a) Neither Holdings nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened (in writing) against any of them, (b) no strike, labor dispute, slowdown or stoppage pending against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened (in writing) against Holdings or any of its Subsidiaries, (c) no union representation question exists with respect to the employees of Holdings or any of its Subsidiaries, (d) no legal actions, lawsuits, arbitrations, administrative or other proceedings, charges, complaints, investigations, inspections, audits or notices of violations or possible violations are pending or, to the knowledge of Holdings or the Borrower, threatened against Holdings or any of its Subsidiaries by or on behalf of, or otherwise involving, any current or former employee, any person alleging to be a current or former employee, any applicant for employment, or any class of the foregoing, or any Governmental Authority, that involve the labor or employment relations and practices of Holdings or any of its Subsidiaries, including but not limited to claims of employment discrimination and (e) no violation of the Fair Labor Standards Act or any other applicable federal, state or foreign wage and hour laws, except (with respect to any matter specified in clauses (a) — (e) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect.

          (b) Neither Holdings nor any of its of their Subsidiaries is, within the United Kingdom, engaged in any unfair or unlawful employment practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is within the United Kingdom (i) no unfair or discriminatory employment practice complaint or investigation pending against Holdings or any of its of their Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened against any of them, before the United Kingdom’s Equality and Human Rights Commission or Health and Safety Executive or any other bodies with similar functions in relation to any person engaged as a worker or afforded the status of a worker (under any laws applicable within the United Kingdom), and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Holdings or the Borrower or any of either of their Subsidiaries or, to the knowledge or Holdings or the Borrower, threatened (in writing) against any of them, (ii) no strike or other employee relations dispute pending against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened (in writing) against any of them, (iii) no disagreement pending against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened (in writing) against any of them in respect of the relations of any of them with any trade union, works council, special negotiating body, staff association or any other body representing individuals afforded the status of workers (under any laws applicable within the United Kingdom), (iv) no legal actions, lawsuits, arbitrations, administrative or other proceedings, charges, complaints, investigations, inspections, audits or notices of violations or possible violations are pending or, to the knowledge of Holdings or the Borrower, threatened against Holdings or any of its Subsidiaries by or on behalf of, or otherwise involving, any current or former employee, any person alleging to be a current or former employee, any applicant for employment or any other individual claiming the status of, or protection afforded to, a worker (under any laws applicable within the United Kingdom), or any Governmental Authority, that involve the employment relations and practices of Holdings or any of its Subsidiaries, including but not limited to claims of employment discrimination, victimization or harassment on any irrational, perverse or prohibited bases, accidents or injuries, breach of contract or unfair dismissal or any claims under the United Kingdom’s Working Time Regulations 1998, National Minimum Wage ▇▇▇ ▇▇▇▇, Data Protection ▇▇▇ ▇▇▇▇, Equal Pay ▇▇▇ ▇▇▇▇, Sex Discrimination ▇▇▇ ▇▇▇▇, Race Relations ▇▇▇ ▇▇▇▇, Disability Discrimination ▇▇▇ ▇▇▇▇, Employment Equality (Sexual Orientation) Regulations 2003,

Employment Equality (Age) Regulations 2006 or Employment Equality (Religion and Belief) Regulations 2003, (v) no complaint of non-compliance by Holdings or any of its Subsidiaries with any provisions of the Treaty of Rome, European Union directives or other directly applicable European Union laws, statutes, regulations, codes of conduct, collective agreements, terms and conditions of employment, orders, declarations and awards relevant to any individual afforded the status of a worker, except (with respect to any matter specified in clauses (i) — (v) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect.

          6.19. Intellectual Property, etc. Each of Holdings and each of its Subsidiaries owns or has the right to use all the patents, trademarks, permits, domain names, service marks, trade names, copyrights, licenses, franchises, inventions, trade secrets, proprietary information and know-how of any type, whether or not written (including, but not limited to, rights in computer programs and databases) and formulas, or rights with respect to the foregoing, and has obtained assignments of all leases, licenses and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to own or have which, as the case may be, could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect.

          6.20. Indebtedness. Schedule 6.20 hereto sets forth a list of all Indebtedness (including Contingent Obligations) of Holdings and its Subsidiaries as of the Funding Date and which is to remain outstanding after giving effect to the Transaction (excluding the Obligations) in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Person that directly or indirectly guarantees such debt.

          6.21. Insurance. Schedule 6.21 hereto sets forth a listing of all insurance maintained by Holdings and its Subsidiaries as of the Funding Date, with the amounts insured (and any deductibles) set forth therein.

          6.22. Holding Company. Holdings is a holding company and does not (a) have any material liabilities (other than (i) liabilities arising under the Credit Documents, any Class C Convertible Preferred Stock and any Junior Financing, (ii) other liabilities which are permitted by this Agreement and are incurred in connection with the financing and operation of Holdings’ and its Subsidiaries’ businesses and (iii) taxes and other liabilities arising under applicable law) or (b) own any material assets or engage in any operations or business (other than (i) its direct or indirect ownership of its Subsidiaries and (ii) Investments permitted under Section 8.05.

          6.23. Immaterial Subsidiaries. On the Funding Date, each of Endeavour Energy Luxembourg S.àr.l., Endeavour Energy New Ventures I, Ltd. and Endeavour Energy North Sea Limited is an Immaterial Subsidiary.

          SECTION 7. Affirmative Covenants. Each of Holdings and the Borrower hereby covenants and agrees that on and after the Funding Date and until the Term Loans and Notes (in each case together with interest thereon), Fees and all other Obligations (other than indemnities described in Section 11.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full:

          7.01. Information Covenants. The Borrower will furnish to the Administrative Agent and each Lender:

     (a) Monthly Reports. Within 30 days after the end of each fiscal month of Holdings, the consolidated balance sheet of Holdings as at the end of such fiscal month and the related consolidated statements of income and statement of cash flows for such fiscal month and for the elapsed portion of the fiscal year ended with the last day of such fiscal month, in each case (i) setting forth comparative figures for the corresponding fiscal month in the prior fiscal year and

comparable forecast figures for such fiscal month as set forth in the respective forecast delivered pursuant to Section 7.01(f) and (ii) in the form prepared for Holdings’ and its Subsidiaries’ monthly internal management reporting package.

     (b) Quarterly Financial Statements. Within 45 days after the close of each quarterly accounting period in each fiscal year of Holdings, (i) the consolidated balance sheet of Holdings as at the end of such quarterly accounting period and the related consolidated statements of income and retained earnings and statement of cash flows for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, in each case setting forth comparative figures for all such financial information for the corresponding quarterly accounting period in the prior fiscal year, and (ii) management’s discussion and analysis of the important operational and financial developments during such quarterly accounting period. All of the foregoing financial statements shall be certified by an Authorized Officer of Holdings that they fairly present in all material respects in accordance with GAAP the consolidated financial condition of Holdings as of the dates indicated and the consolidated results of operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes.

     (c) Annual Financial Statements. Within 90 days after the close of each fiscal year of Holdings, (i) the consolidated balance sheet of Holdings as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statement of cash flows for such fiscal year, setting forth comparative figures for the preceding fiscal year, and certified by KPMG LLP or another independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent, accompanied by an opinion of such accounting firm (which opinion shall be without a “going concern” or like qualification or exception and without any qualification or exception as to scope of audit) and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.

     (d) Reserve Report. Prior to or concurrently with any delivery of financial statements under clause (c) of this Section 7.01 and, solely as to each quarter ending on June 30, under clause (b) of this Section 7.01 (or more frequently at the Borrower’s option) (1) a Reserve Report (which shall be (i) an annual Reserve Report (as described in the definition of such term) in the case of a Reserve Report delivered in connection with annual financial statements or (ii) a semi-annual Reserve Report (as so described) in the case of a Reserve Report delivered in connection with quarterly financial statements for the fiscal quarter ended June 30) setting forth, among other things, (x) the Oil and Gas Properties owned by Holdings and each of its Subsidiaries and covered by such Reserve Report, (y) the Proved Reserves and Probable Reserves attributable to such Oil and Gas Properties and (z) a projection of the rate of production and cash flows of such Proved Reserves and Probable Reserves as of the date as of which the information set forth in such Reserve Report is provided, all in accordance with the guidelines published by the SEC (but utilizing the pricing parameters set forth in the definition of the term PV-10 Value (and, in the case of an annual Reserve Report, in addition to such pricing parameters those specified in such SEC guidelines) and utilizing such operating cost and other assumptions as proposed by the Borrower and (2) a certificate of an Authorized Officer showing any additions to or deletions from the Oil and Gas Properties made by Holdings and each of its Subsidiaries and in Proved Reserves and Probable Reserves attributable to such Oil and Gas Properties since the date of the most recently delivered previous Reserve Report.

     (e) Management Letters. Promptly after Holdings’ or any of its Subsidiaries’ receipt thereof, a copy of any “management letter” received from its certified public accountants and management’s response thereto.

     (f) Forecasts. No later than the 15th day after the end of each fiscal year of Holdings, a forecast in form satisfactory to the Administrative Agent (including forecasted statements of income, cash flow statement and balance sheets for Holdings and its Subsidiaries on a consolidated basis) for each of the twelve months of each succeeding fiscal year through the Maturity Date, in each case setting forth, with appropriate discussion, the principal assumptions upon which such budget is based.

     (g) Compliance Certificate. At the time of the delivery of the financial statements provided for in Sections 7.01(b) and (c), a compliance certificate from the chief financial officer of Holdings in the form of Exhibit H certifying on behalf of Holdings that, to such officer’s knowledge after due inquiry, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof, which certificate shall (i) set forth in reasonable detail the calculations required to establish whether Holdings and its Subsidiaries were in compliance with the provisions of Sections 4.02(b), 4.02(c), 4.02(d), 4.02(e), 4.02(f), 8.01(w), 8.02(e), 8.02(f), 8.02(n), 8.02(o), 8.04(i)(x), 8.04(m), 8.07, 8.08, 8.09 and 8.10 at the end of such fiscal quarter or year, as the case may be, (ii) if delivered with the financial statements required by Section 7.01(c), set forth in reasonable detail the amount of (and the calculations required to establish the amount of) Excess Cash Flow for the respective Excess Cash Flow Payment Period and the amount of any required payment under Section 4.02(f) in respect of such Excess Cash Flow Payment Period, (iii) certify that there have been no changes to Schedule VI of the U.S. Security Agreement, in each case since the Funding Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(g), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this clause (iii), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of the U.S. Security Agreement) and whether Holdings and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to the U.S. Security Agreement in connection with any such changes and (iv) notify the Administrative Agent of the acquisition by it or any of the Subsidiaries of any Oil and Gas Property or Real Property (or any interest in any Oil and Gas Property or Real Property) having a value in excess of $5,000,000.

     (h) Notice of Default, Litigation and Material Adverse Effect. Promptly, and in any event within three Business Days after any officer of Holdings or any of its Subsidiaries obtains knowledge thereof, notice of (A) the occurrence of any event which constitutes a Default or an Event of Default, (B) any litigation or governmental investigation or proceeding pending against Holdings or any of its Subsidiaries (x) which, either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect or (y) with respect to any Credit Documents or (C) any other event, change or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect.

     (i) Other Reports and Filings. Promptly after the filing or delivery thereof, copies of all financial information, proxy materials and reports, if any, which Holdings or any of its Subsidiaries shall (i) publicly file with the SEC or (ii) deliver to holders (or any trustee, agent or other representative therefor) of any Qualified Preferred Stock, any Junior Financing or any other material Indebtedness, in each case pursuant to the terms of the documentation governing the same.

     (j) Environmental Matters. Promptly after any officer of Holdings or any of its Subsidiaries obtains knowledge thereof, notice of one or more of the following environmental matters, but only to the extent that such environmental matters, either individually or when aggregated with all other such environmental matters, could reasonably be expected to have a Material Adverse Effect:

     (i) any pending or threatened claim, proceeding, investigation or notice of violation issued under or pursuant to any Environmental Law against Holdings or any of its Subsidiaries or any Real Property, facility or Oil and Gas Property owned, leased or operated by Holdings or any of its Subsidiaries;

     (ii) any condition or occurrence on or arising from any Real Property, facility or Oil and Gas Property owned, leased or operated by Holdings or any of its Subsidiaries that could reasonably be expected to form the basis of an claim, proceeding, investigation, action or notice of violation against Holdings or any of its Subsidiaries or any such Real Property or facility under any Environmental Law;

     (iii) issuance under any Environmental Law of any liens or restrictions on the ownership, lease, occupancy, use or transferability by Holdings or any of its Subsidiaries of any Real Property, facility or Oil and Gas Property owned, operated or leased by Holdings or any of its Subsidiaries; and

     (iv) the taking of any removal or remedial action as required by any Environmental Law or any Governmental Authority in response to the actual or alleged presence, Release or threatened Release of any Hazardous Material on any Real Property, facility or Oil and Gas Property owned, leased, used or operated by Holdings or any of its Subsidiaries.

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and Holdings’ or such Subsidiary’s response thereto.

     (k) Landlord and Storage Agreements. Promptly after execution thereof, copies of all future material agreements between a Credit Party and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.

     (l) Other Information. From time to time, such other information or documents (financial or otherwise, and including without limitation Project Documents and amendments thereto) with respect to Holdings or any of its Subsidiaries as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request.

Notwithstanding the foregoing, the obligations in clauses (b), (c) and (i) of this Section 7.01 may be satisfied with respect to financial information (or, in the case of such clause (i), other information) of Holdings and the Subsidiaries by filing Holdings’ Form l0-K or 10-Q, as applicable (or, in the case of such clause (i), such other applicable filing), with the SEC or by making such information available on Holdings’ or the Borrower’s website, in each case to the extent the Borrower has notified the Administrative Agent and the Lenders of such filing or that such information is available on such website; provided that to the extent such information is in lieu of information required to be provided under Section 7.01(c), Holdings separately delivers to the Administrative Agent a report and opinion of KPMG LLP or any other independent certified public accounting firm of nationally recognized standing acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance with

generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

          7.02. Books, Records and Inspections; Annual Meetings. (a) Holdings will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which full, true and correct entries in conformity with GAAP and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. Holdings will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Administrative Agent (i) to visit and inspect, under guidance of officers of Holdings or such Subsidiary, any of the properties of Holdings or such Subsidiary and (ii) to examine the books of account of Holdings or such Subsidiary and discuss the affairs, finances and accounts of Holdings or such Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable prior notice and at such reasonable times and intervals and to such reasonable extent as the Administrative Agent may reasonably request.

          (b) At the request of the Administrative Agent, Holdings will within 120 days after the close of each fiscal year of Holdings, hold a meeting (which may be by conference call or teleconference), at a time and place selected by Holdings and reasonably acceptable to the Administrative Agent, with all of the Lenders that choose to participate, to review the financial results of the previous fiscal year and the financial condition of Holdings and its Subsidiaries and the budgets presented for the current fiscal year of Holdings and its Subsidiaries.

          7.03. Maintenance of Property; Insurance. (a) Holdings will, and will cause each of its Subsidiaries to, (i) keep all property necessary to the business of Holdings and its Subsidiaries in good working order and condition, ordinary wear and tear excepted and subject to the occurrence of casualty events, (ii) maintain with financially sound and reputable insurance companies insurance on all such property and against all such risks as is consistent and in accordance with industry practice for companies similarly situated owning similar properties and engaged in similar businesses as Holdings and its Subsidiaries, and (iii) furnish to the Administrative Agent, upon its request therefor, full information as to the insurance carried. Such insurance shall include physical damage insurance on all real and personal property, including, without limitation, on Oil and Gas Properties (whether now owned or hereafter acquired) on an all risk basis. The provisions of this Section 7.03 shall be deemed supplemental to, but not duplicative of, the provisions of any Security Documents that require the maintenance of insurance.

          (b) Holdings will, and will cause each of its Subsidiaries to, at all times keep its property insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (and any other insurance maintained by Holdings and/or such Subsidiaries) (i) shall be endorsed to the Collateral Agent’s satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured), (ii) shall state that such insurance policies shall not be canceled without at least 30 days’ prior written notice thereof by the respective insurer to the Collateral Agent, (iii) shall provide that the respective insurers irrevocably waive any and all rights of subrogation with respect to the Collateral Agent and the other Secured Creditors, and (iv) shall be deposited with the Collateral Agent.

          (c) If Holdings or any of its Subsidiaries shall fail to maintain insurance in accordance with this Section 7.03, or if Holdings or any of its Subsidiaries shall fail to so endorse and deposit all policies or certificates with respect thereto, the Administrative Agent shall have the right (but shall be under no obligation) to procure such insurance, and Holdings and the Borrower jointly and severally agree to reimburse the Administrative Agent for all costs and expenses of procuring such insurance.

          7.04. Existence; Franchises; Oil and Gas Properties. (a) Holdings will, and will cause each of its Subsidiaries to, do or cause to be done, all things necessary to preserve and keep in full force

and effect its existence and its material rights, franchises, licenses, permits, copyrights, trademarks and patents and pay all royalties when due; provided, however, that nothing in this Section 7.04 shall prevent (a) sales of assets and other transactions by Holdings or any of its Subsidiaries in accordance with Section 8.02 or (b) the withdrawal by Holdings or any of its Subsidiaries of its qualification as a Business in any jurisdiction other than the United States or any State thereof or the United Kingdom if such withdrawal could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (b) Holdings will, and will cause each of its Subsidiaries to, (i) comply in all material respects with the terms and provisions of all oil and gas leases and licenses relating to the Oil and Gas Properties of Holdings and each of its Subsidiaries and all contracts and agreements relating thereto or to the production and sale of Hydrocarbons therefrom; provided that Holdings and its Subsidiaries shall have the right to abandon Oil and Gas Properties in the exercise of Holdings’ or such Subsidiaries’ reasonable judgment, in each case in compliance with the relevant Oil and Gas Contracts governing such Oil and Gas Properties, and (ii) with respect to any such Oil and Gas Properties or oil and gas gathering assets that are operated by operators other than Holdings or any of its Subsidiary, use all commercially reasonable efforts to enforce in a manner consistent with industry practice the operator’s contractual obligations to maintain, develop, and operate such Oil and Gas Properties and oil and gas gathering assets in accordance with the applicable operating agreements.

          7.05. Compliance with Statutes, etc. (a) Holdings will, and will cause each of its Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls other than such statutes, regulations, orders and restrictions that are expressly addressed in Section 7.06), except such non-compliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (b) Holdings shall, and shall cause each of its Subsidiaries to, maintain and comply with the terms and conditions of any material Authorization required under any law or regulation (including Environmental Law) (i) to enable it to perform its obligations and/or exercise its rights under, or the validity or enforceability of, each Credit Document and Project Document and (ii) to enable it to conduct the Oil and Gas Business in which has an interest except, in the case of preceding clause (ii) only, such failure to maintain or non-compliance as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          7.06. Compliance with Environmental Laws. (a) Holdings will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or operation of Real Property, facilities and Oil and Gas Property now or hereafter owned, leased or operated by Holdings or any of its Subsidiaries, except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and will promptly pay or cause to be paid all costs and expenses for which Holdings or its Subsidiaries are legally obligated that are incurred in connection with such compliance, and will keep or cause to be kept all such Real Property, facilities and Oil and Gas Properties free and clear of any Liens imposed pursuant to such Environmental Laws. Holdings and its Subsidiaries will generate, use, treat, store, Release and dispose of, and will cause the generation, use, treatment, storage, Release and disposal of Hazardous Materials on any Real Property, facilities or Oil and Gas Properties now or hereafter owned, leased or operated by Holdings or any of its Subsidiaries, and transport or cause the transportation of Hazardous Materials to or from any such Real Property, facilities or Oil and Gas Properties in compliance with all applicable Environmental Laws, except for such Hazardous Materials generated, used, treated, stored, Released and disposed of at any such Real Properties, facilities or Oil and

Gas Properties in connection with or arising out of the business or operations of Holdings or any of its Subsidiaries as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          (b) Upon (i) the receipt by the Administrative Agent or any Lender of any notice from the Borrower of the type described in Section 7.01(j), (ii) a reasonable determination that Holdings or any of its Subsidiaries are not in compliance with Section 7.06(a) or (iii) the exercise by the Administrative Agent or the Lenders of any of the remedies pursuant to the penultimate paragraph of Section 9, each of Holdings and the Borrower will (in each case) collectively, or if either Holdings or the Borrower so desire, individually, provide, upon the request of the Administrative Agent at the sole expense of Holdings and the Borrower, as applicable, an environmental site assessment report concerning any Real Property or facilities owned, leased or operated by Holdings or any of its Subsidiaries, prepared by an environmental consulting firm reasonably acceptable to by the Administrative Agent, indicating, as the circumstances may dictate, the presence or absence of Hazardous Materials and the potential cost of any removal or remedial action in connection with such Hazardous Materials on such Real Property or facilities. If either Holdings or the Borrower fails to provide the same within 30 days after such request was made, the Administrative Agent may order the same, the cost of which shall be borne by the non-responsive Credit Party; and each of Holdings and the Borrower shall grant and hereby grants to the Administrative Agent and the Lenders and their respective agents access to such Real Property and specifically grant the Administrative Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment at any reasonable time upon reasonable notice to Holdings and the Borrower, all at the sole expense of each of Holdings and the Borrower.

          7.07. ERISA. (a) As soon as reasonably practicable and, in any event, within ten (10) days after Holdings, any of its Subsidiaries or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, Holdings will deliver to each of the Lenders a certificate of any Authorized Officer of Holdings setting forth the full details as to such occurrence and the action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given or filed by Holdings, such Subsidiary, the Plan administrator or such ERISA Affiliate to or with the PBGC or any other Governmental Authority, or a Plan participant with respect thereto, and any notices received by Holdings, such Subsidiary or ERISA Affiliate from the PBGC or any other Governmental Authority, or a Plan participant with respect thereto: an ERISA Event (except to the extent that Holdings has previously delivered to the Lenders a certificate and notices (if any) concerning such event pursuant to the next clause hereof); a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA becoming subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days (except to the extent that a waiver to the advance reporting requirement of PBGC Regulation Section 4043.61 applies with respect to such event); a failure of Holdings, any of its Subsidiaries, or an ERISA Affiliate to timely make any contribution required to be made with respect to a Plan or Non-U.S. Pension Plan; the existence of potential withdrawal liability under Section 4201 of ERISA if Holdings, any of its Subsidiaries and any ERISA Affiliate were to withdraw completely from any and all Multiemployer Plans if such withdrawal is reasonably expected to occur and such liability could reasonably be expected to result in a material liability; the adoption of, or the commencement of contributions to, any Plan subject to Section 412 of the Code by Holdings, any of its Subsidiaries or any ERISA Affiliate; the adoption of any amendment to a Plan subject to Section 412 of the Code that results in a material increase in the contribution obligations of Holdings, any of its Subsidiaries or any ERISA Affiliate; a Plan has an Unfunded Current Liability that could reasonably be expected to result in a material liability; with respect to group health plans (as defined in Section 607(1) of ERISA, or Section 4980B(g)(2) of the Code), a

violation of the provisions of Part 6 of subtitle B of Title 1 of ERISA and Section 4980B of the Code that is reasonably expected to result in a material liability to Holdings or any of its Subsidiaries; with respect to group health plans (as defined in 45 Code of Federal Regulations Section 160.103), a violation of the Health Insurance Portability and Accountability Act of 1996 and the regulations promulgated thereunder that could reasonably be expected to result in a material liability to Holdings or any of its Subsidiaries; or the incurrence of any material liability by Holdings or any of its Subsidiaries pursuant to any portion of an employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA). Holdings will deliver to each of the Lenders (i) a copy of each funding waiver request filed with the Internal Revenue Service or any other Governmental Authority with respect to any Plan pursuant to Section 412(d) of the Code or Section 302(c) of ERISA and all communications received by Holdings, any of its Subsidiaries or any ERISA Affiliate from the Internal Revenue Service or any other Governmental Authority regarding such funding waiver request, (ii) copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA and (iii) a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the U.S. Department of Labor. In addition to any certificates or notices delivered to the Lenders pursuant to the first sentence of this Section 7.07(a), copies of annual reports and any records, documents or other information required to be furnished to the PBGC or any other Governmental Authority, and any material notices received by Holdings or any of its Subsidiaries or any ERISA Affiliate, with respect to any Plan or Non-U.S. Plan, shall be delivered to the Lenders no later than ten (10) days after the date such annual reports have been filed or such records, documents and/or information have been furnished to the PBGC or other Governmental Authority or such notice has been received by Holdings, any of its Subsidiaries, or any ERISA Affiliate, as applicable.

          (b) If, at any time after the date of this Agreement, Holdings or any of its Subsidiaries or any ERISA Affiliate maintains, or contributes to (or incurs an obligation to contribute to), a pension plan as defined in Section 3(2) of ERISA that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA (including, without limitation, a Multiemployer Plan) which is not set forth in Schedule 6.10(a) hereto as may be updated from time to time, then Holdings shall deliver to the Agent an updated Schedule 6.10(a) as soon as reasonably practicable and, in any event, within ten (10) days after Holdings, such Subsidiary or such ERISA Affiliate first maintains, or contributes to (or incurs an obligation to contribute to), such pension plan. Such updated Schedule 6.10(a) shall supersede and replace the existing Schedule 6.10(a).

          (c) Holdings and each of its applicable Subsidiaries shall ensure that all Non-U.S. Plans administered by it or to which it contributes obtains or retains (as applicable) registered status under and as required by applicable law and is administered in a timely manner in all respects in compliance with all applicable laws, except where the failure to do any of the foregoing, either individually or in the aggregate, would not be reasonably likely to result in a Material Adverse Effect.

          (d) Holdings and its Subsidiaries shall ensure that none of Holdings or any of its Subsidiaries is or has at any time been, within the United Kingdom, an employer (for the purposes of sections 38 through 51 of the United Kingdom’s Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the United Kingdom’s Pension Schemes Act 1993) or “connected” with or an “associate” of (as those terms are used in sections 38 or 43 of the United Kingdom’s Pensions Act 2004) such an employer.

          7.08. End of Fiscal Years; Fiscal Quarters. Holdings will cause (a) its and each of its Subsidiaries’ fiscal years to end on December 31 of each calendar year and (b) its and each of its

Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31; provided that nothing in this Section 7.08 shall prohibit any Subsidiary of Holdings from maintaining a tax year that does not end on December 31.

          7.09. Performance of Obligations. Holdings will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement and each other agreement, contract or instrument by which it is bound, except such non-performances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          7.10. Payment of Taxes. Holdings will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, would become a Lien or charge upon any properties of Holdings or any of its Subsidiaries not otherwise permitted under Section 8.01(a); provided that neither Holdings nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

          7.11. Use of Proceeds. The Borrower will use the proceeds of the Term Loans only as provided in Section 6.08.

          7.12. Additional Security; Further Assurances; etc. (a) Holdings will, and will cause each other Credit Party to, grant to the Collateral Agent for the benefit of the Secured Creditors security interests and Mortgages in such assets and Real Property of Holdings and such other Credit Party (including, without limitation, Oil and Gas Properties and other properties of Holdings and such other Credit Party acquired subsequent to the Funding Date) as are not covered by the original Security Documents and as may be reasonably requested from time to time by the Administrative Agent or the Required Lenders (collectively, the “Additional Security Documents”). All such security interests and Mortgages shall be granted pursuant to documentation satisfactory in form and substance to the Collateral Agent and shall constitute valid and enforceable perfected security interests, hypothecations and Mortgages superior to and prior to the rights of all third Persons and enforceable against third parties and subject to no other Liens except for Permitted Liens. The Additional Security Documents or instruments related thereto shall have been duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable in connection therewith shall have been paid in full. It is understood and agreed that, notwithstanding anything to the contrary above in this clause (a), neither Holdings nor any of its Subsidiaries will be required pursuant to this clause (a) to (i) grant a security interest in or mortgage on any Oil and Gas Property that would not otherwise be required under Section 7.12(g), (ii) grant a security interest in or mortgage on any leased Real Property that is not an Oil and Gas Property or (iii) grant a security interest in or mortgage on any owned Real Property that is not an Oil and Gas Property unless (x) any such item of Real Property individually has a Fair Market Value of at least $2,500,000 or (y) the aggregate Fair Market Value of such Real Property that would otherwise be excluded from the requirements of this clause (a) would exceed $10,000,000.

          (b) Holdings will, and will cause each of the other Credit Parties to, at the expense of Holdings and the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, real property surveys, reports, landlord lien waivers, collateral access agreements, bailee agreements, control agreements and other assurances or instruments and take such further steps relating to the Collateral covered by any of

the Security Documents as the Collateral Agent may reasonably require. Furthermore, Holdings will, and will cause the other Credit Parties to, deliver to the Collateral Agent such opinions of counsel, title insurance and other related documents as may be reasonably requested by the Collateral Agent to assure itself that this Section 7.12 has been complied with.

          (c) Holdings will cause each Non-Guarantor Subsidiary that ceases to be an Immaterial Subsidiary to execute and deliver all Security Documents (in such form as may be appropriate, as determined by the Administrative Agent, in light of the jurisdiction of organization of such Subsidiary and the location of assets owned by such Subsidiary) and all other relevant documentation (including opinions of counsel as of the type described in Section 5) as such Subsidiary would have had to deliver if such Subsidiary were a Credit Party on the Funding Date.

          (d) If the Administrative Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of any Real Property of Holdings and the other Credit Parties constituting Collateral, Holdings and the Borrower will, at their own expense, provide to the Administrative Agent appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance satisfactory to the Administrative Agent.

          (e) Each of Holdings and the Borrower agree that each action required by clauses (a) through (d) of this Section 7.12 shall be completed as soon as possible, but in no event later than 60 days after such action is requested to be taken by the Administrative Agent or the Required Lenders; provided that, in no event will Holdings or any of its Subsidiaries be required to take any action, other than using its commercially reasonable efforts, to obtain consents from third parties with respect to its compliance with this Section 7.12.

          (f) Within 90 days after Funding Date, furnish the Administrative Agent with title information reasonably satisfactory to the Administrative Agent showing good and defensible (from the perspective of a reasonably prudent investor in the Oil and Gas Business) title, subject only to Permitted Liens, to U.S. Oil and Gas Properties representing in the aggregate not less than 85% of 2P Reserve Value of Holdings’ and its Subsidiaries’ U.S. Oil and Gas Properties as of December 31, 2009, and within 60 days after the making of a request therefor by the Administrative Agent, furnish such title information or Oil and Gas Contracts as may be necessary to achieve title information coverage with respect to Oil and Gas Properties representing in the aggregate not less than 85% of 2P Reserve Value as set forth in the Reserve Report most recently delivered pursuant to Section 7.01(d) prior to the making of such request.

          (g) Regularly monitor engineering data covering all Oil and Gas Properties of Holdings and each of its Subsidiaries and mortgage or cause to be mortgaged such of the same to the Collateral Agent on behalf of the Secured Creditors pursuant to a Mortgage to the extent necessary to ensure that the Obligations shall at all times be secured by first priority perfected Liens and security interests in (i) each Oil and Gas Property having an individual value of $5,000,000 or more (on a contribution to 2P Reserve Value basis) and (ii) Oil and Gas Properties in the aggregate representing not less than 85% of the aggregate 2P Reserve Value attributable to all Oil and Gas Properties, in each case based on the 2P Reserve Value reflected in the most recent Reserve Report.

          7.13. Ownership of Subsidiaries; etc. Except pursuant to a Permitted Acquisition consummated in accordance with the terms hereof, Holdings will, and will cause each of its Subsidiaries to, own, directly or indirectly, 100% of the Equity Interests of each of their Subsidiaries (other than, in the case of a Non-U.S. Subsidiary of Holdings, directors’ qualifying shares and/or other nominal amounts of shares required to be held by local nationals, in each case to the extent required by applicable law).

          7.14. Qualified Preferred Stock. Holdings will pay all Dividends on its Qualified Preferred Stock (other than Class C Convertible Preferred Stock) solely through the issuance of additional shares of such Qualified Preferred Stock (but not in cash); provided that in lieu of issuing additional units of such Qualified Preferred Stock as Dividends, Holdings may increase the liquidation preference of the units of the Qualified Preferred Stock in respect of which Dividends have accrued.

          7.15. Maintenance of Company Separateness. Holdings will, and will cause each of its Subsidiaries to, satisfy customary Business formalities, including the holding of regular Board of Directors’ and members’ meetings or action by managers or members without a meeting and the maintenance of Business records. Neither Holdings nor any other Credit Party shall make any payment to a creditor of any Non-Guarantor Subsidiary in respect of any liability of any Non-Guarantor Subsidiary, and no bank account of any Non-Guarantor Subsidiary shall be commingled with any bank account of Holdings or any other Credit Party. Any financial statements distributed to any creditors of any Non-Guarantor Subsidiary shall clearly establish or indicate the corporate separateness of such Non-Guarantor Subsidiary from Holdings and its other Subsidiaries. Finally, neither Holdings nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the Business existence of Holdings, any other Credit Party or any Non-Guarantor Subsidiaries being ignored, or in the assets and liabilities of Holdings or any other Credit Party being substantively consolidated with those of any other such Person or any Non-Guarantor Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.

          7.16. Board Information Rights. Holdings and (if applicable) the Borrower shall (i) give the Administrative Agent notice of all meetings and activities of the Board of Directors of each of Holdings and (if applicable) the Borrower at the same time as furnished to the directors of Holdings and (if applicable) the Borrower, (ii) provide the Administrative Agent all notices, documents and information furnished to the directors of Holdings and (if applicable) the Borrower, whether at or in connection with a meeting, an action by written consent or otherwise, at the same time furnished to such directors, (iii) provide the Administrative Agent copies of the minutes of all such meetings at the time such minutes are furnished to the members of the applicable Board of Directors and (iv) furnish to the Administrative Agent, at the same time such information is delivered to the Board of Directors of Holdings, comparable figures with respect to annual financial statements delivered pursuant to Section 7.01(c) as set forth in the respective forecast delivered pursuant to Section 7.01(f). Notwithstanding any other provision of this Section 7.16, Holdings and the Borrower shall be entitled to withhold information from the Administrative Agent delivered to such Board of Directors prior to any meeting of such Board of Directors if Holdings or the Borrower, as the case may be, reasonably believes, at the recommendation of counsel, there is a reasonable likelihood that the receipt of such information by Administrative Agent would create a conflict of interest for in respect of the Term Loans or, if privileged, would reasonably be expected to effectively waive the attorney/client privilege of Holdings or the Borrower with respect thereto. Holdings and the Borrower will, promptly following request therefor, cause the Chief Executive Officer and/or the Chief Financial Officer (as determined by the Administrative Agent) of each of Holdings and the Borrower to meet (telephonically, or at the Administrative Agent’s option, in person) with representatives of the Administrative Agent to review and discuss any documents or other information delivered to the Administrative Agent pursuant to this Section 7.16.

          7.17. Permitted Acquisitions. (a) Subject to the provisions of this Section 7.17 and the requirements contained in the definition of Permitted Acquisition, the Qualified Credit Parties may from time to time effect Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) the Borrower shall have given to the Administrative Agent and the Lenders at least 10 Business Days’ prior written notice of any

Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the Administrative Agent), which notice shall describe in reasonable detail the principal terms and conditions of such Permitted Acquisition; (iii) drafts of the definitive documentation for each such Permitted Acquisition shall have been delivered to the Administrative Agent at least five Business Days’ prior to the consummation thereof (with subsequent drafts to be delivered to the Administrative Agent as and when such drafts become available to the Borrower); (iv) in the case of any Material Permitted Acquisition, calculations are made by the Borrower with respect to the financial covenant contained in Sections 8.08 through 8.10, inclusive, for the respective Calculation Period on a Pro Forma Basis as if the respective Material Permitted Acquisition (as well as all other Material Permitted Acquisitions theretofore consummated after the first day of such Calculation Period) had occurred on the first day of such Calculation Period, and such calculations shall show that such financial covenants would have been complied with as of the last day of such Calculation Period; (v) in the case of any Material Permitted Acquisition, based on good faith projections prepared by the Borrower for the period from the date of the consummation of the respective Material Permitted Acquisition to the date which is one year thereafter, the level of financial performance measured by the financial covenants set forth in Sections 8.08 through 8.10, inclusive, shall be better than or equal to such level as would be required to provide that no Default or Event of Default would exist under the financial covenants contained in such Sections 8.08 through 8.10, inclusive, as compliance with such financial covenants would be required through the date which is one year from the date of the consummation of the respective Material Permitted Acquisition; (vi) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Permitted Acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; (vii) such Permitted Acquisition is permitted under, and is consummated in accordance with, Section 8.02(n), (o) or (p); and (viii) the Borrower shall have delivered to the Administrative Agent and each Lender a certificate executed by an Authorized Officer of the Borrower, certifying to the best of such officer’s knowledge, compliance with the requirements of preceding clauses (i) through (vii), inclusive, and containing the calculations (in reasonable detail) required by preceding clauses (iv), (v) and (vii).

          (b) At the time of each Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of capital stock or other Equity Interest of any Person, the capital stock or other Equity Interests thereof created or acquired in connection with such Permitted Acquisition shall be pledged for the benefit of the Secured Creditors pursuant to (and to the extent required by) the applicable Security Document.

          (c) The Borrower will cause each Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver all of the documentation as and to the extent required by, Sections 7.12 and 8.15, to the reasonable satisfaction of the Administrative Agent.

          (d) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by each of Holdings and the Borrower that the certifications pursuant to this Section 7.17 are true and correct and that all conditions thereto have been satisfied and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder, including, without limitation, Sections 6 and 9.

          7.18. Commodity Hedging Agreements. From and after the 90th day following the Funding Date, Holdings and its Subsidiaries will maintain in effect Commodity Hedging Agreements with one or more Approved Third Party Credit Providers that establish minimum prices in accordance

with the Borrower’s hedging policies as in effect on the Funding Date or in accordance with generally accepted business practice on a volume of Hydrocarbons equal to not less than (i) 50% of the projected PDP production (measured as of each date of delivery to the Administrative Agent of the Reserve Reports and certificates required by Section 7.01(d)) from the Oil and Gas Properties of Holdings and its Subsidiaries for the succeeding twelve calendar months and (ii) 35% of such projected PDP production for the twelve calendar month period subsequent to the calendar month period referred to in preceding clause (i). It is understood and agreed that Reserve Reports reflect projected production on an annual basis, and the Borrower shall be permitted to determine projected production on a monthly basis for purposes of this Section 7.18 by prorating annual production reflected in such Reserve Reports over the months covered thereby or using such other method as the Borrower deems reasonable.

          7.19. Project Documents, etc. Each Credit Party shall (i) ensure that none of its rights under or in respect of any Project Document are at any time cancelled, terminated, suspended or limited if the same would be reasonably likely to result in a Material Adverse Effect, (ii) not agree to any waiver, amendment, termination or cancellation of any Project Document if the same would be reasonably likely to result in Material Adverse Effect, (iii) duly and properly perform, in all material respects, its obligations under the Project Documents (except to the extent, if any, that such performance is inconsistent with its obligation under the Credit Documents or any such failure to perform as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect), (iv) exercise its rights, under and in respect of the Project Documents consistently with its obligations under the Credit Documents and (v) not enter into any Project Document which would be reasonably likely to result in a Material Adverse Effect.

          7.20. Oil and Gas Properties. Each Credit Party shall (i) exercise such votes and other rights as it may have under the Project Documents with a view to ensuring (so far as able) that each Oil and Gas Property in which Holding or any of its Subsidiaries has an interest is at all times exploited and operated in a reasonable and prudent manner and in accordance with good industry practice, all applicable laws and regulations and the provisions of the Project Documents, (ii) not concur in, and shall vote against, any proposal or decision to abandon all or any material part of any of Oil and Gas Properties in which Holdings or any of its Subsidiaries has an interest unless the Administrative Agent has granted its prior written consent, (iii) not exercise its rights on any operating or similar committee in a manner that would be materially prejudicial to the interests of any Credit Party, the Administrative Agent or the Lenders and (iv) maintain full and proper technical and financial records in relation to each Oil and Gas Property in which Holdings or any of its Subsidiaries has an interest and ensure (so far as it is able) that the Administrative Agent (and/or any person nominated by it) is afforded reasonable access to each Oil and Gas Property in which it has an interest and all such records during normal business hours on reasonable notice.

          7.21. Listing of the Notes. (a) The Borrower shall (i) cause the Notes (including any Notes issued in connection with the payment of PIK Interest) to be admitted for listing on either the Cayman Island Stock Exchange or Channel Island Stock Exchange (either such Exchange, an “Approved Stock Exchange”) prior to December 31, 2010, in either case in accordance with the listing rules promulgated by the respective Approved Stock Exchange and applicable law, (ii) cause the Notes to continue to be listed on an Approved Stock Exchange at all times from and after December 31, 2010 and (iii) comply with all obligations required pursuant to the respective Approved Stock Exchange relating to the continued listing of the Notes on such Approved Stock Exchange.

          (b) Promptly following receipt thereof by the Borrower, the Borrower shall deliver to the Administrative Agent copies of all financial information, reports, documents or other materials filed with an Approved Stock Exchange.

          SECTION 8. Negative Covenants. Each of Holdings and the Borrower hereby covenants and agrees that on and after the Funding Date and until the Term Loans and Notes (in each case, together with interest thereon), Fees and all other Obligations (other than any indemnities described in Section 11.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full:

          8.01. Liens. Holdings will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to Holdings or any of its Subsidiaries), or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “Permitted Liens”):

     (a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

     (b) Liens in respect of property or assets of Holdings or any of its Subsidiaries imposed by law or which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as operators’, vendors’, carriers’, warehousemen’s, materialmen’s, repairmen’s, suppliers’, workers’, construction and mechanics’ liens and other similar Liens arising in the ordinary course of business, and (i) which do not in the aggregate materially detract from the value of Holdings’ or such Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of Holdings or such Subsidiary or (ii) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien;

     (c) Liens in existence on the Funding Date which are listed, and the property subject thereto described, in Schedule 8.01(c) hereto, plus renewals, replacements and extensions of such Liens; provided that (i) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase from that amount outstanding at the time of any such renewal, replacement or extension and (ii) any such renewal, replacement or extension does not encumber any additional assets or properties of Holdings or any of its Subsidiaries;

     (d) Liens created by or pursuant to this Agreement and the Security Documents;

     (e) (i) licenses, sublicenses, leases or subleases granted by Holdings or any of its Subsidiaries to other Persons not materially interfering with the conduct of the business of Holdings or any of its Subsidiaries and (ii) any interest or title of a lessor, sublessor or licensor under any lease or license agreement permitted by this Agreement to which Holdings or any of its Subsidiaries is a party;

     (f) Liens upon assets of Holdings or any of its Subsidiaries subject to Capitalized Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section 8.04(d); provided that (i) such Liens only serve to secure the payment of Indebtedness arising under such Capitalized Lease Obligation and (ii) the Lien encumbering the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset of Holdings or any of its Subsidiaries;

     (g) Liens placed upon equipment or machinery acquired after the Funding Date and used in the ordinary course of business of Holdings or any of its Subsidiaries and placed at the time of the acquisition thereof by Holdings or such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or to secure Indebtedness incurred solely for the purpose of financing the acquisition of any such equipment or machinery or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided that (i) the Indebtedness secured by such Liens is permitted by Section 8.04(d) and (ii) in all events, the Lien encumbering the equipment or machinery so acquired does not encumber any other asset of Holdings or such Subsidiary;

     (h) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of Holdings or any of its Subsidiaries;

     (i) Liens arising from precautionary UCC financing statement filings regarding operating leases entered into in the ordinary course of business;

     (j) Liens arising out of the existence of judgments or awards in respect of which Holdings or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings; provided that the aggregate amount of all cash and the Fair Market Value of all other property subject to such Liens does not exceed $7,500,000 at any time outstanding;

     (k) statutory and common law landlords’ liens under leases to which Holdings or any of its Subsidiaries is a party;

     (l) Liens (other than Liens imposed under ERISA) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance and social security benefits and Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and consistent with past practice (exclusive of obligations in respect of the payment for borrowed money);

     (m) Liens arising out of any conditional sale, title retention, consignment or other similar arrangements for the sale of goods entered into by Holdings or any of its Subsidiaries in the ordinary course of business to the extent such Liens do not attach to any assets other than the goods subject to such arrangements;

     (n) Liens (i) incurred in the ordinary course of business in connection with the purchase, processing or shipping of goods or assets (or the related assets and proceeds thereof), which Liens are in favor of the seller or shipper of such goods or assets and only attach to such goods or assets, and (ii) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

     (o) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by Holdings or any of its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements;

     (p) Liens on insurance proceeds securing the payment of financed insurance premiums;

     (q) Liens arising in the ordinary course of business under rig deposits, operating agreements, joint venture agreements, partnership agreements, oil and gas leases, Oil and Gas Contracts, overriding royalty agreements, farm-out and farm-in agreements, division orders, contracts for the sale, transportation or exchange of oil or natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements and other agreements that are customary in the Oil and Gas Business; provided, that (i) the amount of any obligations secured thereby that are delinquent, that are not diligently contested in good faith and for which adequate reserves are not maintained by Holdings, the Borrower or the applicable Subsidiary, as the case may be, do not exceed, at any time outstanding, the amount owing by Holdings, the Borrower or such Subsidiary, as applicable, for two months’ billed operating expenses or other expenditures attributable to such Person’s interest in the property covered thereby, (ii) the obligations secured thereby do not constitute obligations in respect of borrowed money and (iii) any such Liens referred to in this clause (q) do not materially impair the use of the property affected by such Liens or the purposes for which such property is held by Holdings or such Subsidiary or materially impair the value of such property;

     (r) Liens reserved in leases or licenses of Oil and Gas Properties and in Oil and Gas Contracts for royalties, bonus or rental payments and for compliance with the terms of such leases, provided, that the amount of any obligations secured thereby that are delinquent, that are not diligently contested in good faith and for which adequate reserves are not maintained by Holdings, the Borrower or the applicable Subsidiary, as the case may be, do not exceed, at any time outstanding, the amount owing by Holdings, the Borrower or such Subsidiary, as applicable, for two months’ payments as due thereunder;

     (s) Liens securing Permitted Junior Debt (subject to the limitations set forth in the definition of such term); provided that the Permitted Junior Debt Notes Representative in respect of such Permitted Junior Debt and the Collateral Agent shall have executed and delivered the Permitted Junior Debt Intercreditor Agreement;

     (t) Liens on pipeline or pipeline facilities that arise under operation of law;

     (u) Liens not securing any obligation arising from UCC financing statements (and similar filings) filed inadvertently or with malicious intent, which the Borrower diligently seeks to remove and terminate (or causes to be removed or terminated) promptly upon, and in any event no later than 120 days following, its discovery of same;

     (v) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of Holdings in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition; provided that (a) any Indebtedness that is secured by such Liens is permitted to exist under Section 8.04(g), and (b) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of Holdings or any of its Subsidiaries; and

     (w) Liens arising from deposits of cash or Cash Equivalents to secure obligations under the ▇▇▇▇ Contracts (or letters of credit supporting such obligations) or other obligations permitted under Section 8.04(i) so long as the aggregate amount of such cash and Cash

Equivalents so deposited does not exceed $32,234,880 (it being understood and agreed that the initial utilization of this basket with respect to cash and Cash Equivalents securing letters of credit supporting obligations under the ▇▇▇▇ Contracts shall be deemed to have been made on the Effective Date).

In connection with the granting of Liens of the type described in clauses (c), (f), (g), (i), (q), (r) and (v) of this Section 8.01 by the Borrower of any of its Subsidiaries, the Collateral Agent shall, to the extent requested by (and at the expense of) the Borrower, execute appropriate lien releases or lien subordination agreements in favor of the holder or holders of such Liens, in each case in form and substance satisfactory to the Collateral Agent and solely with respect to the item or items of equipment or other assets subject to such Liens.

          8.02. Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any partnership, joint venture, or transaction of merger or consolidation, or convey, sell, lease, assign or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (including Oil and Gas Properties) but excluding purchases or other acquisitions of Hydrocarbons and other inventory, materials and equipment in the ordinary course of business) of any Person, except that:

     (a) Capital Expenditures shall be permitted to the extent not in violation of Section 8.07;

     (b) Holdings and its Subsidiaries may sell Hydrocarbons and other inventory in the ordinary course of business;

     (c) Holdings and its Subsidiaries may liquidate or otherwise dispose of obsolete, uneconomic or worn-out property in the ordinary course of business;

     (d) (i) Investments may be made to the extent permitted by Section 8.05, (ii) Liens may be granted to the extent permitted by Section 8.01 and (iii) Dividends may be made to the extent permitted by Section 8.03;

     (e) Holdings and its Subsidiaries may sell assets (other than the capital stock or other Equity Interests of the Borrower or of any other Wholly-Owned Subsidiary, unless all of the capital stock or other Equity Interests of such Wholly-Owned Subsidiary (other than the Borrower) are sold in accordance with this clause (e)), so long as (i) no Default or Event of Default then exists or would result therefrom, (ii) each such sale is in an arm’s-length transaction and Holdings or the respective Subsidiary receives at least Fair Market Value, (iii) the consideration received by Holdings or such Subsidiary consists of at least 90% cash and is paid at the time of the closing of such sale (iv) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 4.02(d) and (v) the aggregate amount of the cash and non-cash proceeds received from all assets sold pursuant to this clause (e) shall not exceed $25,000,000 in any fiscal year of Holdings (for this purpose, using the Fair Market Value of property other than cash);

     (f) Holdings and its Subsidiaries may sell, in one or more transactions, up to 50% of the 2P Reserves located in the North Sea listed in Holdings’ Reserve Report delivered pursuant to Section 5.13 so long as (i) no Default or Event of Default then exists or would result therefrom, (ii) each such sale is in an arm’s-length transaction and Holdings or the respective Subsidiary receives at least Fair Market Value, (iii) the consideration received by Holdings or

such Subsidiary consists of at least 90% cash and is paid at the time of the closing of such sale and (iv) the Net Sale Proceeds therefore are applied and/or reinvested as (and to the extent) required by Section 4.02(d);

     (g) Holdings and its Subsidiaries may dispose of Oil and Gas Properties and acquire Oil and Gas Properties in contemporaneous exchanges; provided that (i) such acquired Oil and Gas Properties have a comparable or higher value as reasonably determined by Holdings, (ii) the only consideration paid for such acquisition is the Oil and Gas Property disposed of in connection with such acquisition or other consideration independently permitted under any other clause of this Section 8.02 and (iii) if the Fair Market Value of the Oil and Gas Properties to be disposed exceeds $50,000,000, Holdings shall obtain a resolution of its Board of Directors approving such exchange and deliver such resolutions to the Administrative Agent;

     (h) Holdings and its Subsidiaries may lease (as lessee) or license (as licensee) real or personal property other than Oil and Gas Properties, so long as any such lease or license does not create a Capitalized Lease Obligation except to the extent permitted by Section 8.04(d);

     (i) Holdings and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction;

     (j) Holdings and its Subsidiaries may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of Holdings or any of its Subsidiaries, in each case so long as no such grant otherwise affects the Collateral Agent’s security interest in the asset or property subject thereto;

     (k) Holdings and its Subsidiaries may convey, sell or otherwise transfer all or any part of its business, properties and assets to Holdings or any Subsidiary of Holdings, so long as (i) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer) and all actions required to maintain said perfected status have been taken and (ii) any such business, property and assets conveyed, sold or otherwise transferred pursuant to this clause (k) by (A) a Credit Party are conveyed, sold or otherwise transferred to another Credit Party and (B) a Qualified Credit Party are conveyed, sold or otherwise transferred to another Qualified Credit Party;

     (l) Holdings and its Subsidiaries may merge or consolidate with and into, or be dissolved or liquidated into, Holdings or any other Subsidiary of Holdings, so long as (i) in the case of any such merger, consolidation, dissolution or liquidation involving a Credit Party, a Credit Party is the surviving or continuing entity of any such merger, consolidation, dissolution or liquidation, (ii) in the case of any such merger, consolidation, dissolution or liquidation involving a Qualified Credit Party, a Qualified Credit Party is the surviving or continuing entity of any such merger, consolidation, dissolution or liquidation, (iii) in the case of any such merger, consolidation, dissolution or liquidation involving the Borrower, the Borrower is the surviving or continuing entity of any such merger, consolidation, dissolution or liquidation, and (iv) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of Holdings or such Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, consolidation, dissolution or liquidation) and all actions required to maintain said perfected status have been taken;

     (m) each of Holdings and its Subsidiaries may liquidate or otherwise dispose of Cash Equivalents in the ordinary course of business, in each case for cash at Fair Market Value;

     (n) Holding and its Subsidiaries may make Permitted Business Investments and consummate Permitted Acquisitions pursuant to this clause (n) so long as the sum of the aggregate amount paid in respect of such Permitted Business Investments and the Aggregate Consideration paid in respect of Permitted Acquisitions, in each case made pursuant to this clause (n), when added to the aggregate amount of Capital Expenditures made pursuant to Section 8.07(e), does not exceed $50,000,000;

     (o) Holding and its Subsidiaries may make Permitted Business Investments and consummate Permitted Acquisitions pursuant to this clause (o); provided that the aggregate consideration paid in connection with such Permitted Business Investments plus the Aggregate Consideration paid in connection with such Permitted Acquisitions, in each case made pursuant to this clause (o), in any fiscal year does not exceed 5% of 2P Reserve Value based on the most recently delivered annual Reserve Report;

     (p) Holdings and its Subsidiaries may make Permitted Business Investments and consummate Permitted Acquisitions pursuant to this clause (p) with Net Sale Proceeds from Asset Sales made in accordance with Section 8.02(e) and (f);

     (q) Holdings and its Subsidiaries may enter into contractual joint venture arrangements with third parties pursuant to Oil and Gas Contracts; provided that such arrangements do not result in, or constitute the formation of, a Business in which Holdings or any of its Subsidiaries acquire Equity Interests not otherwise permitted by Section 8.05; and

     (r) Holdings and its Subsidiaries may dispose of Hydrocarbon Interests in exchange for a commitment of the transferee to bear a disproportionate share of the costs attributable to the Oil and Gas Properties to which such Hydrocarbon Interests relate.

To the extent the Required Lenders waive the provisions of this Section 8.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 8.02 (other than to Holdings or a Subsidiary thereof), such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall execute appropriate releases in order to effect the foregoing to the extent requested by (and at the expense of) the Borrower. For the avoidance of doubt, Holdings’ and its Subsidiaries’ use of cash and Cash Equivalents to acquire assets in accordance with this Section 8.02 shall not constitute a conveyance, sale, lease or other disposition of property or assets that is subject to the restrictions set forth in this Section 8.02.

          8.03. Dividends. Holdings will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to Holdings or any of its Subsidiaries, except that:

     (a) any Subsidiary of Holdings may authorize, declare and pay cash Dividends to Holdings or to any Wholly-Owned Subsidiary of Holdings;

     (b) any Non-Wholly-Owned Subsidiary of Holdings may authorize, declare and pay cash Dividends to its shareholders, members or partners generally, so long as Holdings or its respective Subsidiary which owns the Equity Interest in the Subsidiary paying such Dividends receives at least its proportionate share thereof (based upon its relative holding of the Equity Interest in the Subsidiary paying such Dividends and taking into account the relative preferences, if any, of the various classes of Equity Interests of such Subsidiary);

     (c) any Subsidiary may authorize, declare and pay non-cash Dividends to Holdings or any other Subsidiary of Holdings so long as, after giving effect thereto, (i) any property or asset which is the subject of any Dividend made pursuant to this clause (c) (A) by any Credit Party is owned by another Credit Party and (B) by any Qualified Credit Party is owned by another Qualified Credit Party, and (ii) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the property or assets which are the subject of such Dividend shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such Dividend) and all actions required to maintain said perfected status have been taken;

     (d) Holdings may redeem, repurchase or otherwise acquire for value, outstanding shares of Holdings Common Stock (or options or warrants to purchases Holdings Common Stock) following the death, disability or termination of employment of officers, directors or employees of Holdings or any of its Subsidiaries or following the vesting of restricted stock options of Holdings’ employees in order to fund any Taxes due upon such vesting; provided that (i) the only consideration paid by Holdings in respect of such redemptions, purchases or other acquisitions shall be cash, (ii) at the time of any purchase or payment permitted to be made pursuant to this Section 8.03(d), no Default or Event of Default shall then exist or result therefrom and (iii) the amount of all such redemptions, repurchases or other acquisitions shall not exceed (A) $2,500,000 in any fiscal year of Holdings or (B) $5,000,000 in the aggregate;

     (e) Holdings, may pay regularly scheduled Dividends on its Qualified Preferred Stock pursuant to the terms thereof solely through the issuance of additional units of such Qualified Preferred Stock (but not in cash); provided that in lieu of issuing additional units of such Qualified Preferred Stock as Dividends, Holdings may increase the liquidation preference of the units of Qualified Preferred Stock in respect of which such Dividends have accrued; and

     (f) Holdings may pay regularly scheduled cash Dividends on all outstanding shares of its Class C Convertible Preferred Stock.

          8.04. Indebtedness. Holdings will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:

     (a) Indebtedness incurred pursuant to this Agreement and the other Credit Documents;

     (b) Existing Indebtedness outstanding on the Funding Date and listed on Schedule 6.20 hereto (as reduced by any repayments of principal thereof), plus extensions, renewals or refinancings thereof (“Refinancing Debt”); provided that (i) the aggregate principal amount of the Indebtedness to be extended, renewed or refinanced (“Refinanced Debt”) does not increase from that amount outstanding at the time of any such extension, renewal or refinancing, (ii) the weighted average life to maturity of such Refinancing Debt is greater than or equal to that of the related Refinanced Debt, (iii) the final stated maturity of such Refinancing Debt shall be no earlier than the maturity date applicable to the related Refinanced Debt, and (iv) no Refinancing Debt shall have greater security than the related Refinanced Debt;

     (c) Indebtedness of Holdings or any of its Subsidiaries under Hedging Agreements so long as the entering into of such Hedging Agreements are bona fide hedging activities and are not for speculative purposes;

     (d) Indebtedness of Holdings or any of its Subsidiaries evidenced by Capitalized Lease Obligations (to the extent permitted pursuant to Section 8.07) and purchase money

Indebtedness described in Section 8.01(g); provided that in no event shall the sum of the aggregate principal amount of all Capitalized Lease Obligations and purchase money Indebtedness permitted by this clause (d) exceed $5,000,000 at any time outstanding;

     (e) Indebtedness constituting Intercompany Loans to the extent permitted by Section 8.05(h);

     (f) Indebtedness consisting of guaranties by the Qualified Credit Parties of each other’s Indebtedness and lease and other contractual obligations permitted under this Agreement;

     (g) Indebtedness of a Qualified Credit Party acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness); provided that (i) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition and (ii) such Indebtedness does not constitute debt for borrowed money, it being understood and agreed that Capitalized Lease Obligations and purchase money Indebtedness shall not constitute debt for borrowed money for purposes of this clause (ii);

     (h) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within four Business Days of the incurrence thereof;

     (i) Indebtedness of Holdings or any of its Subsidiaries with respect to (A) Third Party Letters of Credit or (B) performance bonds, surety bonds, appeal bonds or customs bonds, or obligations in respect of letters of credit posted in lieu of, or to secure, any such bonds, required in the ordinary course of business or in connection with the enforcement of rights or claims of Holdings or such Subsidiary or in connection with judgments that do not result in a Default or an Event of Default; provided that (x) the aggregate outstanding amount of all such Third Party Letters of Credit, performance bonds, surety bonds, appeal bonds, customs bonds and letters of credit issued in lieu of any such bonds permitted by this clause (i) shall not at any time exceed $60,000,000 and (y) all Indebtedness under this clause (i) shall be unsecured, except as permitted under Section 8.01(w) and for security granted pursuant to the Security Documents in respect of no more than $25,000,000 of outstanding obligations under Hedging Agreements entered into with and Third Party Letters of Credit issued by Approved Third Party Credit Providers that are party to the Intercreditor Agreement;

     (j) Indebtedness of Holdings or any of its Subsidiaries which may be deemed to exist in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with the acquisition or disposition of assets in accordance with the requirements of this Agreement, so long as any such obligations are those of the Person making the respective acquisition or sale, and are not guaranteed by any other Person except as permitted by Section 8.04(f);

     (k) Indebtedness consisting of the financing of insurance premiums;

     (l) Permitted Junior Debt; and

     (m) so long as no Default or Event of Default then exists or would result therefrom, additional Indebtedness of Holdings or any of its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

          8.05. Advances, Investments and Loans. Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other Equity Interest in, or make any capital contribution to, any other Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Cash Equivalents (each of the foregoing an “Investment” and, collectively, “Investments”), except:

     (a) Holdings and its Subsidiaries may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of Holdings or such Subsidiary;

     (b) Subject to the limitations set forth in Section 8.05(h) and (i), Holdings and its Subsidiaries may acquire and hold cash and Cash Equivalents;

     (c) Holdings and its Subsidiaries may hold the Investments held by them on the Funding Date and described on Schedule 8.05(c) hereto; provided that any additional Investments made with respect thereto shall be permitted only if permitted under the other provisions of this Section 8.05;

     (d) Holdings and its Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

     (e) Holdings and its Subsidiaries may make loans and advances to their officers, employees and consultants for moving, relocation and travel expenses and other similar expenditures, in each case in the ordinary course of business in an aggregate amount not to exceed $2,500,000 at any time (determined without regard to any write-downs or write-offs of such loans and advances);

     (f) Holdings and its Subsidiaries may acquire and hold obligations of their officers, employees and consultants in connection with such officers’, employees’ and consultants’ acquisition of shares of Holdings Common Stock (so long as no cash is actually advanced by Holdings or any of its Subsidiaries in connection with the acquisition of such obligations);

     (g) Holdings and its Subsidiaries may enter into Hedging Agreements to the extent permitted by Section 8.04(c);

     (h) Holdings or any of its Subsidiaries may make intercompany loans and advances to Holdings or any other Subsidiary of Holdings (“Intercompany Loans”); provided that (A) other than (x) loans and advances to any Subsidiary that is not a Credit Party (including any Immaterial Subsidiary that is not a Credit Party) in an aggregate outstanding amount that does not, when added to the aggregate amount of Investments outstanding pursuant to Section 8.05(i)(C)(x), exceed $1,000,000 at any time and (y) loans and advances to the Dutch Subsidiaries pursuant to Holdings’ tax planning and cash management policies consistent with past practice (so long as within one Business Day following receipt by any Dutch Subsidiary of the proceeds of such loans and advances, the same are contributed, loaned or advanced to a Qualified Credit Party to the extent that the aggregate amount of cash and Cash Equivalents held by all the Dutch Subsidiaries would otherwise exceed $2,500,000), any such Intercompany Loans made by a Credit Party shall be made to another Credit Party and any such Intercompany Loan made by a Qualified Credit Party shall be made to another Qualified Credit Party, (B) to the

extent any such Intercompany Loan made by a Credit Party is evidenced by a note issued on or after the Funding Date, such note shall be evidenced by an Intercompany Note which shall be pledged to the Collateral Agent pursuant to the applicable Security Documents, (C) each Intercompany Loan made to a Credit Party by any Subsidiary of Holdings that is not a Credit Party shall be subject to the subordination provisions reasonably acceptable to the Administrative Agent and (D) any Intercompany Loans made to any Credit Party or any Qualified Credit Party pursuant to this clause (h) shall cease to be permitted by this clause (h) if such Credit Party or such Qualified Credit Party ceases to constitute a Credit Party or a Qualified Credit Party, as the case may be;

     (i) Holdings or any of its Subsidiaries may make capital contributions to, or acquire Equity Interests of, any other Subsidiary of Holdings; provided that (A) any security interest granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in any assets so contributed shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such contribution) and all actions required to maintain said perfected status have been taken, (B) to the extent such acquired Equity Interests are issued to a Credit Party the same are pledged to the Collateral Agent pursuant to the respective Security Documents, (C) other than (x) cash contributions to, or acquisitions of Equity Interests of, any Subsidiary that is not a Credit Party (including any Immaterial Subsidiary that is not a Credit Party) in an aggregate outstanding amount (calculated as of the date of such contributions or acquisitions, net any returns) that does not, when added to the aggregate amount of Intercompany Loans outstanding pursuant to Section 8.05(h)(A)(x), exceed $1,000,000 and (y) cash contributions to the Dutch Subsidiaries pursuant to Holdings’ tax planning and cash management policies consistent with past practice (so long as within one Business Day following receipt by any Dutch Subsidiary of the proceeds of such cash contributions, the same are contributed, loaned or advanced to a Qualified Credit Party to the extent that the aggregate amount of cash and Cash Equivalents held by all the Dutch Subsidiaries would otherwise exceed $2,500,000), any such cash contributions (or acquisitions of Equity Interests) made by a Credit Party shall be made to (or shall be Equity Interests of) another Credit Party and any such cash contributions (or acquisitions of Equity Interests) made by a Qualified Credit Party shall be made to (or shall be Equity Interests of) another Qualified Credit Party, (D) any Investment made in or to any Credit Party or any Qualified Credit Party pursuant to this clause (i) shall cease to be permitted hereunder if such Credit Party ceases to constitute a Credit Party or such Qualified Credit Party ceases to constitute a Qualified Credit Party, as the case may be;

     (j) Holdings and its Subsidiaries may own the Equity Interests of their respective Subsidiaries created or acquired in accordance with the terms of this Agreement (so long as all amounts invested in such Subsidiaries are independently justified under another provision of this Section 8.05);

     (k) Contingent Obligations permitted by Section 8.04, to the extent constituting Investments, shall be permitted;

     (l) Holdings or any of its Subsidiaries may acquire and hold non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Sections 8.02(e) and 8.02(f); and

     (m) Permitted Acquisitions shall be permitted in accordance with the requirements of Section 7.17.

          8.06. Transactions with Affiliates. Holdings will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions with any Affiliate of Holdings

or any of its Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to Holdings or such Subsidiary as would reasonably be obtained by Holdings or such Subsidiary at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except that the following in any event shall be permitted:

     (a) Dividends may be paid to the extent provided in Section 8.03;

     (b) loans may be made and other transactions may be entered into by Holdings and its Subsidiaries to the extent permitted by Sections 8.02, 8.04 and 8.05;

     (c) customary fees, indemnities and reimbursements may be paid to non-officer directors or managers of Holdings and its Subsidiaries;

     (d) Holding may issue Holdings Common Stock and Qualified Preferred Stock (and options, warrants and rights with respect thereto);

     (e) Holdings and its Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock compensation plans, indemnification provisions and other similar compensatory arrangements with officers, employees, managers and directors of Holdings and its Subsidiaries in the ordinary course of business; and

     (f) Subsidiaries of Holdings may pay management fees, licensing fees and similar fees to Holdings or to any Qualified Credit Party.

          8.07. Capital Expenditures. (a) Holdings will not, and will not permit any of its Subsidiaries to, make any Capital Expenditures, except that (i) during the period from the Funding Date through and including December 31, 2010, Holdings and its Subsidiaries may make Capital Expenditures so long as the aggregate amount of all such Capital Expenditures does not exceed $70,000,000 and (ii) during any fiscal year of Holdings set forth below (taken as one accounting period), Holdings and its Subsidiaries may make Capital Expenditures so long as the aggregate amount of all such Capital Expenditures does not exceed in any fiscal year of Holdings set forth below the amount set forth opposite such fiscal year below:

Fiscal Year Ending		Amount
December 31, 2011		$	200,000,000
December 31, 2012		$	350,000,000
December 31, 2013		$	175,000,000

          (b) In addition to the foregoing, in the event that the amount of Capital Expenditures permitted to be made by Holdings and its Subsidiaries pursuant to clause (a) above in any fiscal year of Holdings is greater than the amount of Capital Expenditures actually made by Holdings and its Subsidiaries during such fiscal year, such excess may be carried forward and utilized to make Capital Expenditures in the immediately succeeding fiscal year (with any such carried forward amounts being deemed utilized first for the purposes of determining utilization of the amount of Capital Expenditures permitted under Section 8.07(a) in such succeeding fiscal year); provided that no amounts once carried forward pursuant to this Section 8.07(b) may be carried forward to any fiscal year of Holdings thereafter; provided further, that for any fiscal year of Holdings, the aggregate amount of Capital Expenditures that would otherwise be permitted in such fiscal year pursuant to Section 8.07(a) and (b) may be increased by an amount not to exceed 100% of the scheduled amount permitted for the next succeeding fiscal year (the “CapEx Pull-Forward Amount”). The actual CapEx Pull-Forward Amount in respect of any such

fiscal year shall reduce, on a dollar-for-dollar basis, the amount of Capital Expenditures pursuant to Section 8.07(a) that are permitted to be made in the immediately succeeding fiscal year.

          (c) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 8.07(a) or (b)) with the amount of Net Sale Proceeds received by Holdings or any of its Subsidiaries from any Asset Sale so long as such Net Sale Proceeds are reinvested within the Relevant Reinvestment Period, but only to the extent that such Net Sale Proceeds are not otherwise required to be applied as a mandatory repayment pursuant to Section 4.02(d).

          (d) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 8.07(a) or (b)) with the amount of Net Insurance Proceeds received by Holdings or any of its Subsidiaries from any Recovery Event so long as such Net Insurance Proceeds are reinvested within the Relevant Reinvestment Period, but only to the extent that such Net Insurance Proceeds are not otherwise required to be applied as a mandatory repayment pursuant to Section 4.02(e).

          (e) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 8.07(a) or (b)) so long as the amount aggregate amount of such Capital Expenditures, when added to the Aggregate Consideration paid in respect of all Permitted Acquisitions consummated pursuant to Section 8.02(n) and the aggregate amount of Permitted Business Investments made pursuant to Section 8.02(n), does not exceed $50,000,000.

          8.08. Maximum Total Leverage Ratio. Holdings will not permit the Total Leverage Ratio for any Test Period ending on the last day of any fiscal quarter of Holdings set forth below to be greater than the ratio set forth opposite such fiscal quarter below:

Fiscal Quarter Ending		Ratio
September 30, 2010			7.85:1.00
December 31, 2010			7.85:1.00
March 31, 2011			7.00:1.00
June 30, 2011			6.50:1.00
September 30, 2011			5.75:1.00
December 31, 2011			5.00:1.00
March 31, 2012			4.25:1.00
June 30, 2012			3.75:1.00
September 30, 2012			3.25:1.00
December 31, 2012 and each fiscal quarter thereafter			3.00:1.00

          8.09. Minimum EBITDAX. Holdings will not permit Consolidated EBITDAX for any Test Period ending on the last day of any fiscal quarter of Holdings set forth below to be less than the amount set forth opposite such fiscal quarter below:

Fiscal Quarter Ending		Amount
September 30, 2010		$	45,000,000
December 31, 2010		$	50,000,000
March 31, 2011		$	55,0000,00
June 30, 2011		$	60,000,000
September 30, 2011		$	70,000,000
December 31, 2011		$	90,000,000
March 31, 2012		$	100,000,000
June 30, 2012		$	120,000,000
September 30, 2012		$	140,000,000
December 31, 2012		$	180,000,000
March 31, 2013		$	200,000,000
June 30, 2013		$	200,000,000

          8.10. Minimum Asset Coverage Ratios. (a) Holdings will not permit the Reserve Coverage Ratio as of the last day of any fiscal quarter of Holdings ending after the Funding Date to be less than 3.00:1.00.

          (b) Holdings will not permit the PDP Coverage Ratio as of the last day of any fiscal quarter ending (i) after the Funding Date and on or prior to September 30, 2011, to be less than 0.25:1.00 and (ii) after September 30, 2011, to be less than 0.50:1.00.

          8.11. Limitations on Prepayments of Junior Financing; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc. Holdings will not, and will not permit any of its Subsidiaries to:

     (a) make (or give any notice in respect of) any voluntary or optional payment or prepayment on or redemption, repurchase or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar required “repurchase” event of (including, in each case without limitation, by way of depositing with the trustee with respect thereto or any other Person money or securities before due for the purpose of paying when due), any Junior Financing; provided that (i) the 2012 Convertible Senior Notes, the 2014 Convertible Senior Notes and the 2014 Senior Subordinated Notes may be prepaid, redeemed or acquired (A) in accordance with Section 8.04(b) or (B) with Net Cash Proceeds of Permitted Junior Debt or issuances of common Equity Interests or Qualified Preferred Stock and (ii) Permitted Junior Debt may, subject to the provisions of the definition thereof, be prepaid, redeemed or acquired with Net

Cash Proceeds from subsequent issuances of Permitted Junior Debt, common Equity Interests or Qualified Preferred Stock;

     (b) amend or modify, or permit the amendment or modification of, any provision of any Junior Financing (or any documentation evidencing same) in any manner that is adverse to the interests of the Lenders in any material respect without the prior written consent of the Administrative Agent;

     (c) designate any Indebtedness (or related interest obligations) as “Designated Senior Debt” or similar term except for the Obligations;

     (d) amend, modify or change its certificate or articles of organization (including, without limitation, by the filing or modification of any certificate or articles of designation), certificate of formation, limited liability company agreement or by-laws (or the equivalent organizational documents), as applicable, or any agreement entered into by it with respect to its capital stock or other Equity Interests (including any Qualified Preferred Stock), or enter into any new agreement with respect to its capital stock or other Equity Interests, unless such amendment, modification, change or other action contemplated by this clause (d) could not reasonably be expected to be adverse to the interests of the Lenders in any material respect and the terms of any such amendment, modification, change or other action will not violate any of the other provisions of this Agreement or any other Credit Document; or

     (e) amend, modify or change any provision of (i) any Management Agreement unless such amendment, modification or change could not reasonably be expected to be adverse to the interests of the Lenders in any material respect (although no amendment, modification or change may be made to any monetary term thereof) or (ii) any Tax Sharing Agreement or enter into any new tax sharing agreement, tax allocation agreement or similar agreement unless such amendment, modification, change or entering into any such new tax sharing agreement could not reasonably be expected to be adverse to the interests of the Lenders in any material respect (although no amendment, modification or change may be made to any monetary term thereof).

          8.12. Limitation on Certain Restrictions on Subsidiaries. Holdings will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other Equity Interest or participation in its profits owned by Holdings or any of its Subsidiaries, or pay any Indebtedness owed to Holdings or any of its Subsidiaries, (b) make loans or advances to Holdings or any of its Subsidiaries or (c) transfer any of its properties or assets to Holdings or any of its Subsidiaries, except for such encumbrances or restrictions existing on the Funding Date and set forth on Schedule 8.12 and such other encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) any agreement evidencing any Permitted Junior Debt; provided that such encumbrances and restrictions in agreements evidencing Permitted Junior Debt are on customary and market terms for similar financings and in any event are no more onerous to Holdings and its Subsidiaries than those encumbrances and restrictions contained in this Agreement and the other Loan Documents, but only if such negative pledge or restriction expressly permits Liens for the benefit of the Administrative Agent and/or the Collateral Agent and the Lenders with respect to the credit facilities established hereunder and the Obligations under the Credit Documents on a senior basis, (iv) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of Holdings or any of its Subsidiaries, (v) customary provisions restricting assignment of any licensing agreement (in which Holdings or any of its Subsidiaries is the licensee), Oil and Gas Contracts or other contract entered into by Holdings or any of its Subsidiaries in the ordinary course of business, (vi) restrictions on the transfer of any asset pending the close of the sale of such asset, (vii) restrictions on the transfer of any asset subject to a Lien permitted by Section 8.01(c),

(f), (g), (p) and (w), (viii) customary provisions restricting assignment of any agreement entered into in the ordinary course of business, and (ix) any agreement in effect at the time a Person becomes a Subsidiary, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary.

          8.13. Limitation on Issuance of Equity Interests. (a) Holdings will not, and will not permit any of its Subsidiaries to, issue (i) any Preferred Equity Interests other than issuance by Holdings of Qualified Preferred Stock pursuant to clause (c) below or (ii) any redeemable common stock or other redeemable common Equity Interests other than redeemable common stock or other redeemable common Equity Interests that is or are redeemable at the sole option of Holdings or such Subsidiary, as the case may be.

          (b) Holdings will not permit any of its Subsidiaries to issue any capital stock or other Equity Interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock or other Equity Interests, except (i) for transfers and replacements of then outstanding shares of capital stock or other Equity Interests, (ii) for stock splits, stock dividends and other issuances which do not decrease the percentage ownership of Holdings or any of its Subsidiaries in any class of the capital stock or other Equity Interests of such Subsidiary, (iii) in the case of Non U.S. Subsidiaries of Holdings, to qualifying directors to the extent required by applicable law and for other nominal share issuances to Persons other than Holdings and its Subsidiaries to the extent required under applicable law and (iv) for issuances by Subsidiaries of Holdings which are newly created or acquired in accordance with the terms of this Agreement.

          (c) Holdings may from time to time (i) issue Qualified Preferred Stock, so long as (x) no Default or Event of Default shall exist at the time of any such issuance or immediately after giving effect thereto, and (y) with respect to each issuance of Qualified Preferred Stock, the gross cash proceeds therefrom (or in the case of Qualified Preferred Stock directly issued by Holdings as consideration for Permitted Acquisitions, the Fair Market Value of the assets received therefor) shall be at least equal to 100% of the liquidation preference thereof at the time of issuance and (ii) issue additional units of Qualified Preferred Stock to pay in kind regularly scheduled Dividends on Qualified Preferred Stock theretofore issued in compliance with this Section 8.13(c).

          8.14. Business. (a) Holdings will not, and will not permit any of its Subsidiaries to, engage directly or indirectly in any business other than the Oil and Gas Business.

          (b) Notwithstanding the foregoing or anything else in this Agreement to the contrary, Holdings will not (i) have any material liabilities other than (A) liabilities arising under the Credit Documents, any Class C Convertible Preferred Stock and any Junior Financing, (B) other liabilities which are permitted by this Agreement and are incurred in connection with the financing and operation of Holdings’ and its Subsidiaries’ businesses, and (C) taxes and other liabilities arising under any applicable law or (ii) own any material assets or engage in any operations or business (other than (A) its direct or indirect ownership of its Subsidiaries and (B) investments permitted under Section 8.05).

          8.15. Limitation on Creation of Subsidiaries. (a) Holdings will not, and will not permit any of its Subsidiaries to, establish, create or acquire after the Funding Date any Subsidiary (other than Non-Wholly-Owned Subsidiaries permitted to be acquired in accordance with the requirements of Section 8.15(b)); provided that Holdings and its Wholly-Owned Subsidiaries shall be permitted to establish, create and, to the extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries, so long as, in each case, (i) at least 10 days’ prior written notice thereof is given to the Administrative Agent (or such shorter period of time as is acceptable to the Administrative Agent in any given case), (ii) the capital stock or other Equity Interests of such new Wholly-Owned Subsidiary are promptly pledged pursuant to, and to the extent required by, this Agreement and the applicable Security Documents and the

certificates, if any, representing such stock or other Equity Interests, together with stock or other appropriate powers duly executed in blank, are delivered to the Collateral Agent and (iii) each such new Wholly-Owned Subsidiary becomes a party to the applicable Security Documents and, to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 7.12. In addition, each new Wholly-Owned Subsidiary that is required to execute any Credit Document shall execute and deliver, or cause to be executed and delivered, all other relevant documentation (including opinions of counsel) of the type described in Section 5 as such new Wholly-Owned Subsidiary would have had to deliver if such new Subsidiary were a Credit Party on the Funding Date.

          (b) In addition to Subsidiaries of Holdings created pursuant to preceding clause (a), Holdings and its Wholly-Owned Subsidiaries may acquire Non-Wholly-Owned Subsidiaries after the Funding Date as a result of Permitted Acquisitions (subject to the limitations contained in the definition thereof); provided that (i) all of the capital stock or other Equity Interests of each such Non-Wholly-Owned Subsidiary shall be pledged by any Credit Party which owns same as, and to the extent, required by the applicable Security Documents, and (ii) each such Non-Wholly-Owned Subsidiary shall take the actions specified in Section 8.15(a) to the same extent that such Non-Wholly Owned Subsidiary would have been required to take if it were a Wholly-Owned Subsidiary of Holdings.

          8.16. Limitation on Commodity Hedging. Holdings will not and will not permit any of its Subsidiaries to enter into any Commodity Hedge Agreement if, after giving effect thereto the total volume of Hydrocarbons to be hedged under Commodity Hedging Agreements would exceed, at the time of entering into any Commodity Hedge Agreement, 90% of the projected 2P production from the Oil and Gas Properties of Holdings and each of its Subsidiaries for the period during which such Commodity Hedging Agreement is in effect.

          8.17. Elections. Without the prior written consent of the Required Lenders and the Administrative Agent, Holdings will not, and will not permit any of its Subsidiaries to, make any election for U.S. federal income tax purposes that causes the Indebtedness of the Borrower to be treated as the Indebtedness of a “U.S. person” (as such term is defined under Section 7701(a)(30) of the Code) for U.S. federal income tax purposes.

          SECTION 9. Events of Default.

          Upon the occurrence of any of the following specified events (each, an “Event of Default”):

          9.01. Payments. The Borrower shall (a) default in the payment when due of any principal of any Term Loan or any Note, or (b) default, and such default shall continue unremedied for three or more Business Days, in the payment when due of any interest on any Term Loan or any Note or any Fees or any other amounts owing hereunder or under any other Credit Document; or

          9.02. Representations, etc. Any representation, warranty or statement made or deemed made by any Credit Party herein or in any other Credit Document or in any certificate delivered to the Administrative Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

          9.03. Covenants. Holdings or any of its Subsidiaries shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.01(b), 7.01(c), 7.01(g)(i) and (ii), 7.03 (other than clause (a)(i) thereof), 7.04 (with respect to the Borrower only), 7.11, 7.13, 7.17 or Section 8 or (b) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement (other than those set forth in Sections 9.01 and

9.02) and such default shall continue unremedied for a period of 30 days following the earlier of (i) Holdings’ or the Borrower’s actual knowledge of such default and (ii) written notice from the Administrative Agent or the Required Lenders specifying such default; or

          9.04. Default Under Other Agreements. (a) Holdings or any of its Subsidiaries shall (i) default in any payment of any Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in an instrument or agreement under which such Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity, or (b) any Indebtedness (other than the Obligations) of Holdings or any of its Subsidiaries shall be declared to be (or shall become) due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; provided that, it shall not be a Default or an Event of Default under this Section 9.04 unless the aggregate principal amount of all Indebtedness as described in preceding clauses (a) and (b) is at least $7,500,000; or

          9.05. Bankruptcy, etc. Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary), and the petition is not controverted within 10 days, or is not dismissed within 60 days after the filing thereof; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary), to operate all or any substantial portion of the business of Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary), or Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary), or there is commenced against Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) any such proceeding which remains undismissed for a period of 60 days after the filing thereof, or Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) makes a general assignment for the benefit of creditors; or any Business action is taken by Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) for the purpose of effecting any of the foregoing; or

          9.06. ERISA. (a) An ERISA Event shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in Subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days (except to the extent that a waiver to the advance reporting requirement of PBGC Regulation 4043.61 applies with respect to such event); any Plan shall have an Unfunded Current Liability; there is or arises any potential withdrawal liability under Section 4201 of ERISA, if Holdings, any of its Subsidiaries, or any ERISA Affiliate were to withdraw completely from any and all Multiemployer Plans; a contribution required to be made by Holdings, any of its Subsidiaries or any ERISA Affiliate with respect to a Plan or Non-U.S. Plan has not been timely made, Holdings, any of its Subsidiaries or any ERISA Affiliate has incurred or is likely to incur any liability on account of a group health plan (as defined in Section 607(1)

of ERISA, Section 4980B(g)(2) of the Code or 45 Code of Federal Regulations Section 160.103) under Section 4980B of the Code and/or the Health Insurance Portability and Accountability Act of 1996; or Holdings or any of its Subsidiaries has incurred or is likely to incur liabilities pursuant to any portion of any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA); any applicable law, rule or regulation is adopted, changed or interpreted, or the interpretation or administration thereof is changed, in each case after the date hereof, by any Governmental Authority (a “Change in Law”), or, as a result of a Change in Law, an event occurs following a Change in Law, with respect to or otherwise affecting any Plan; (b) there shall result from any of the events set forth in (a) above the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability; and (c) such lien, security interest or liability described in (a) or (b) above, either individually or in the aggregate, in the opinion of the Required Lenders has had, or could reasonably be expected to have, a Material Adverse Effect; or

          9.07. Security Documents. Any of the Security Documents shall cease to be in full force and effect, or shall cease to give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Lien on, all of the Collateral (other than any immaterial portion thereof), in favor of the Collateral Agent, subject to no other Liens (except Permitted Liens), or any Credit Party shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any such Security Document and such default shall continue beyond the period of grace, if any, specifically applicable thereto pursuant to the terms of such Security Document; or

          9.08. Guaranties. Any Guaranty or any provision thereof shall cease to be in full force or effect as to any Guarantor (except as a result of a release of any Guarantor in accordance with the terms thereof), or any Guarantor or any Person acting for or on behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations under the Guaranty to which it is a party or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Guaranty to which it is a party; or

          9.09. Judgments. One or more judgments or decrees shall be entered against Holdings or any Subsidiary of Holdings involving in the aggregate for Holdings and its Subsidiaries a liability (to the extent not paid or not covered by a reputable and solvent insurance company pursuant to which the insurer has accepted liability therefor in writing) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds $7,500,000; or

          9.10. Nationalization. All or any part of the interest of Holdings or any of its Subsidiaries in any Oil and Gas Property (or any Hydrocarbons or revenues or other monies arising in respect of it) is (a) nationalized, expropriated, compulsorily acquired or seized by any Governmental Authority, or (b) any such Governmental Authority takes, or officially announces it will take, any step with a view to any of the foregoing and in either case such action is reasonably likely to result in a Material Adverse Effect; or

          9.11. Project Documents. (a) All or any part of any Project Document is not, or ceases to be, a legal, valid and binding obligations of any Person party thereto in any circumstance which is reasonably likely to have a Material Adverse Effect, (b) any party to any Project Document defaults under such Project Document in the circumstances which are reasonably likely to result in a Material Adverse Effect or (c) all or any part of any Project Document is suspended, terminated or revoked in circumstances which are reasonably likely to result in a Material Adverse Effect; or

          9.12. Change of Control. A Change of Control shall occur;

then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 9.05 shall occur with respect to the Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (a) and (b) below, shall occur automatically without the giving of any such notice): (a) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately without any other notice of any kind; (b) declare the principal of and any accrued interest in respect of all Term Loans and the Notes and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; and (c) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents.

After the exercise of remedies provided for in immediately preceding paragraph, any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order (to the fullest extent permitted by mandatory provisions of applicable law):

     First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including legal, consultant fees and other out-of-pocket expenses payable under Section 11.01) payable to the Administrative Agent, the Collateral Agent or the Lead Arranger in its capacity as such;

     Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including reasonable attorneys’ and consultants’ fees and disbursements payable under Section 11.01), ratably among them in proportion to the amounts described in this clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Term Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Term Loans ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;

     Fifth, to the payment of all other Obligations that are due and payable to the Administrative Agent, Collateral Agent and the other Lenders on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent, Collateral Agent and the other Lenders on such date; and

     Last, the balance, if any, after all of the Obligations have been paid in full, to the Borrower or other Credit Party as otherwise required by applicable law.

          SECTION 10. The Administrative Agent.

          10.01. Appointment. The Lenders hereby irrevocably designate and appoint Cyan Partners, LP, as Administrative Agent (for purposes of this Section 10 and Section 11.01, the term “Administrative Agent” also shall include Cyan Partners, LP, in its capacity as Collateral Agent pursuant to the Security Documents) to act as specified herein and in the other Credit Documents. Each Lender

hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder by or through its officers, directors, agents, employees or affiliates.

          10.02. Nature of Duties. (a) The Administrative Agent in its capacity as such shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent in its capacity as such nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.

          (b) Notwithstanding any other provision of this Agreement or any provision of any other Credit Document, the Lead Arranger is named as such for recognition purposes only, and in its capacity as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Credit Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Lead Arranger shall be entitled to all indemnification and reimbursement rights in favor of the Administrative Agent as, and to the extent, provided for under Sections 10.06 and 11.01. Without limitation of the foregoing, the Lead Arranger shall not, solely by reason of this Agreement or any other Credit Documents, have any fiduciary relationship in respect of any Lender or any other Person.

          10.03. Lack of Reliance on the Administrative Agent. Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (a) its own independent investigation of the financial condition and affairs of Holdings and its Subsidiaries in connection with the making and the continuance of the Term Loans and the taking or not taking of any action in connection herewith and (b) its own appraisal of the creditworthiness of Holdings and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Term Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of Holdings or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of Holdings or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default.

          10.04. Certain Rights of the Agents. If any Agent shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, such Agent shall be entitled to refrain from such act or taking such action unless and until such Agent shall have received instructions from the Required Lenders; and such Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against such Agent as a result of such Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.

          10.05. Reliance. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.

          10.06. Indemnification. To the extent the Administrative Agent (or any affiliate, officer, director, employee, representative, agent, sub-agent or advisor thereof (each, a “Related Party”)) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the Administrative Agent (and any such Related Party) in proportion to their respective “percentage” as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any such Related Party) in performing its duties hereunder or under any other Credit Document or in any way relating to or arising out of this Agreement or any other Credit Document; provided that (a) the unreimbursed expense or indemnified loss was incurred by or asserted against the Administrative Agent in its capacity as such (or any Related Party acting for the Administrative Agent in connection with such capacity) and (b) no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s (or such affiliates’ thereof) gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

          10.07. Each Agent in its Individual Capacity. With respect to its obligation to make Term Loans under this Agreement, each Agent shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lender,” “Required Lenders,” “holders of Notes” or any similar terms shall, unless the context clearly indicates otherwise, include such Agent in its individual capacity. Each Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to any Credit Party or any Affiliate of any Credit Party (or any Person engaged in a similar business with any Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

          10.08. Holders. Any Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is

the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

          10.09. Resignation by the Administrative Agent. (a) The Administrative Agent may resign from the performance of all of its respective functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days’ prior written notice to the Lenders and, unless a Default or an Event of Default then exists, the Borrower. Any such resignation by an Administrative Agent hereunder shall also constitute its resignation as the Collateral Agent, and upon the effectiveness of such resignation of an Administrative Agent in accordance with this Section 10.09 the resigning Administrative Agent shall no longer be required to discharge any duties of the “Collateral Agent” under the Security Documents. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below.

          (b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrower, which acceptance shall not be unreasonably withheld or delayed (provided that the Borrower’s approval shall not be required if an Event of Default then exists).

          (c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed, provided that the Borrower’s consent shall not be required if an Event of Default then exists), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.

          (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 20th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.

          (e) Upon a resignation of the Administrative Agent (and the Collateral Agent) pursuant to this Section 10.09, the Administrative Agent (and the Collateral Agent) shall remain indemnified to the extent provided in this Agreement and the other Credit Documents and the provisions of this Section 10 (and the analogous provisions of the other Credit Documents) shall continue in effect for the benefit of the Administrative Agent (and the Collateral Agent) for all of its actions and inactions while serving as the Administrative Agent (and the Collateral Agent).

          10.10. Collateral Matters. (a) Each Lender authorizes and directs the Collateral Agent to enter into the Subsidiaries Guaranty and Security Documents for the benefit of the Lenders and the other Secured Creditors. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.

          (b) The Lenders hereby authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon termination of the Total Commitment and payment and satisfaction of all of the Obligations (other than inchoate indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) constituting property being sold or otherwise disposed of (to Persons other than Holdings and its Subsidiaries) upon the sale or other disposition thereof in compliance with Section 8.02, (iii) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.12) or (iv) as otherwise may be expressly provided in the relevant Security Documents. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.10.

          (c) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

          10.11. Delivery of Information. The Administrative Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Administrative Agent from any Credit Party, any Subsidiary thereof, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document except (a) as specifically provided in this Agreement or any other Credit Document and (b) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Administrative Agent at the time of receipt of such request and then only in accordance with such specific request.

          SECTION 11. Miscellaneous.

          11.01. Payment of Expenses, etc. (a) The Borrower hereby agrees to: (i) whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and disbursements of White & Case LLP and the Administrative Agent’s other counsel and consultants) in connection with the preparation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, of the Administrative Agent and its Affiliates in connection with its or their syndication efforts with respect to this Agreement and of the Administrative Agent and, after the occurrence of an Event of Default, each of the Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings (including, in each case without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent and, after the occurrence of an Event of Default, counsel for

each of the Lenders); (ii) pay and hold the Administrative Agent and each of the Lenders harmless from and against any and all present and future stamp, excise and other similar documentary taxes with respect to the foregoing matters and save the Administrative Agent and each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to the Administrative Agent or such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and each Lender, and each of their respective officers, directors, employees, representatives, agents, affiliates, trustees and investment advisors (each, an “Indemnified Person”) from and hold each of them harmless against any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (x) any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of the proceeds of any Term Loans hereunder or the consummation of the Transaction or any other transactions contemplated herein or in any other Credit Document or the syndication of this Agreement or the exercise of any of their rights or remedies provided herein or in the other Credit Documents, or (y) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real Property at any time owned, leased, used by or operated by Holdings or any of its Subsidiaries or any of their respective predecessors (but with respect to formerly owned, leased, used or operated Real Properties, only to the extent arising from the acts or omissions of Holdings or any of its Subsidiaries), the generation, storage, transportation, handling or disposal of Hazardous Materials by Holdings or any of its Subsidiaries or any of their respective predecessors at any location, whether or not owned, leased, used by or operated by Holdings or any of its Subsidiaries, the non-compliance by Holdings or any of its Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any Real Property, or any claim under any Environmental Law asserted against Holdings, any of its Subsidiaries or any of their respective predecessors or any Real Property at any time owned, leased, used by or operated by such entity, including, in each case, without limitation, the reasonable fees and disbursements of counsel and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Indemnified Person to be indemnified (as determined by a court of competent jurisdiction in a final and non-appealable decision)). To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Holdings shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law.

          (b) To the full extent permitted by applicable law, each of Holdings and the Borrower shall not assert, and hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or incidental damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document, any other agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby or any Loan or the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby, except to the extent the liability of such Indemnified Person results from such Indemnified Person’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

          11.02. Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender or any Affiliate, branch or agency thereof (including, without limitation, by branches and agencies of the Administrative Agent or such Lender or Affiliate wherever located) to or for the credit or the account of Holdings or any of its Subsidiaries against and on account of the Obligations and liabilities of the Credit Parties to the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender pursuant to Section 11.04(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured.

          11.03. Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopier or cable communication) and mailed, telegraphed, telecopied, cabled or delivered: if to the Borrower, to Endeavour Energy UK Limited, ▇▇▇ ▇▇. ▇▇▇▇▇▇’▇ ▇▇▇▇, London WC2N 4BE, England, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Facsimile: 44 20 7451 2351, with a copy to Endeavour International Corporation, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, if to any Credit Party (other than the Borrower), c/o Endeavour International Corporation, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, if to any Lender, at its address specified on Schedule 11.03 hereto; and if to the Administrative Agent, at the Notice Office; or, as to any Credit Party or the Administrative Agent, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Administrative Agent. All such notices and communications shall, when mailed, telegraphed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telecopier, except that notices and communications to the Administrative Agent, and the Borrower shall not be effective until received by the Administrative Agent or the Borrower, as the case may be.

          11.04. Benefit of Agreement; Assignments; Participations. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, that neither Holdings nor the Borrower may assign or transfer any of its rights, obligations or interest hereunder without the prior written consent of the Lenders and, provided further, that, although any Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a “Lender” for all purposes hereunder (and may not transfer or assign all or any portion of its Commitment or any related Obligations hereunder except as provided in Sections 2.08 and 11.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a “Lender” hereunder and, provided further, that no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Term Loan or Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the

Total Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment (or the available portion thereof) or Term Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (ii) consent to the assignment or transfer by Holdings or the Borrower of any of its rights and obligations under this Agreement or (iii) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Term Loans hereunder in which such participant is participating. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.

          (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitments and related outstanding Obligations (or, if the Commitments have terminated, outstanding Obligations) hereunder to (i) (A) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or (B) to one or more other Lenders or any affiliate of any such other Lender which is at least 50% owned by such other Lender or its parent company (provided that any fund that invests in loans and is managed or advised by the same investment advisor of another fund which is a Lender (or by an Affiliate of such investment advisor) shall be treated as an affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of any Lender or by an Affiliate of such investment advisor; provided that, in no event shall any assignment of Commitments or Term Loans pursuant to this clause (x) be made to Holdings, the Borrower or any of their respective Subsidiaries or Affiliates, or (y) assign all, or if less than all, a portion equal to at least $5,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitment and related outstanding Obligations (or, if the Commitment has terminated, outstanding Obligations) hereunder to one or more Eligible Transferees (treating any fund that invests in loans and any other fund that invests in loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, provided that (i) at such time, Schedule 1.01(b) shall be deemed modified to reflect the Commitments and/or outstanding Term Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender’s indemnifying the Borrower for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the Borrower’s expense, to such new Lender and to the assigning Lender, such new Notes to be in conformity with the requirements of Section 2.04 (with appropriate modifications) to the extent needed to reflect the revised Commitments and/or outstanding Term Loans, as the case may be, (iii) the consent of the Administrative Agent and after the Syndication Date, so long as no Default or Event of Default then exists, the Borrower, shall be required in connection with any such assignment pursuant to clause (y) above (such consent, in any case, not to be unreasonably withheld, delayed or conditioned); provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof, (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500 and (v) no such transfer or assignment will be effective until recorded by the Administrative Agent on the Register pursuant to Section 11.15. To the extent of any assignment pursuant to this Section 11.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitment and outstanding Term Loans. To the extent that an assignment of all or any portion of a Lender’s Commitment and related outstanding Obligations pursuant to Section 2.08 or this Section 11.04(b), would, at the time of such assignment, result in increased costs

under Section 2.09 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment).

          (c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Term Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but without the consent of the Administrative Agent or the Borrower), any Lender which is a fund may pledge all or any portion of its Term Loans and Notes to its trustee or to a collateral agent or financial institution providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or such financial institution, as the case may be. No pledge pursuant to this clause (c) shall release the transferor Lender from any of its obligations hereunder.

          (d) Any Lender which assigns all of its Commitments and/or Term Loans hereunder in accordance with Section 11.04(b) shall cease to constitute a “Lender” hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 4.04, 10.06, 11.01 and 11.06), which shall survive as to such assigning Lender.

          11.05. No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent, the Collateral Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the Collateral Agent or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Collateral Agent or any Lender to any other or further action in any circumstances without notice or demand.

          11.06. Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Obligations hereunder, the Administrative Agent shall distribute such payment to the Lenders entitled thereto (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received.

          (b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Term Loans, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if

all or any portion of such excess amount is thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

          (c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 11.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

          11.07. Calculations; Computations. (a) All accounting determinations under this Agreement and all financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by Holdings to the Lenders); provided that, (i) except as otherwise specifically provided herein, all computations and all definitions (including accounting terms) used in determining compliance with Sections 8.07 through 8.10, inclusive, shall utilize GAAP and policies in conformity with those used to prepare the audited financial statements of Holdings and its Subsidiaries referred to in Section 6.05(a) for the fiscal year ended December 31, 2009 and (ii) to the extent expressly provided herein, certain calculations shall be made on a Pro Forma Basis. Holdings, the Borrower and the Administrative Agent, on behalf of the Lenders, agree that in the event of any material change in GAAP (any such change, for the purpose of this Section 11.07, an “Accounting Change”) that occurs after the date of this Agreement, then following the written request of either the Borrower or the Administrative Agent, the Borrower and the Administrative Agent shall enter into good faith negotiations in order to amend such provisions of this Agreement so as to equitably reflect any such Accounting Change with the desired result that the criteria for evaluating the financial condition of Holdings and its Subsidiaries shall be the same after such Accounting Change as if such Accounting Change had not been made, and until such time as such an amendment shall have been executed and delivered by Holdings, the Borrower and Required Lenders, (a) all financial covenants, standards and terms in this Agreement shall be calculated and/or construed as if such Accounting Change had not been made, and (b) the Borrower shall prepare footnotes to each certificate and the financial statements required to be delivered pursuant to Sections 7.01(a), (b), (c), and (g) hereunder that show the differences between the financial statements delivered (which reflect such Accounting Change) and the basis for calculating financial covenant compliance (without reflecting such Accounting Change).

          (b) All computations of interest and Fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or Fees are payable.

          (c) For purposes of any computation determining compliance with any incurrence or expenditure tests set forth in Sections 7 and/or 8 or with Dollar-based basket levels appearing in Sections 4.01 or 4.02 or any definitions contained in Section 1.01, any amounts so incurred, expended or utilized (to the extent incurred, expended or utilized in a currency other than Dollars) shall be converted into Dollars on the basis of the Exchange Rates as in effect on the date of such incurrence, expenditure or utilization under any provision of any such Section or definition that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence, expenditure or utilization test regulates the aggregate amount outstanding at any time and it is expressed in terms of Dollars, all outstanding amounts originally incurred or spent in currencies other than Dollars shall be converted into Dollars on the basis of the Exchange Rates as in effect on the date of any new incurrence, expenditure or utilization made under any provision of any such Section that regulates the Dollar amount outstanding at any time).

          11.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE RELEVANT SECURITY DOCUMENT BE

CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (EXCEPT THAT, (X) IN THE CASE OF ANY MORTGAGE OR OTHER SECURITY DOCUMENT, PROCEEDINGS MAY ALSO BE BROUGHT BY THE ADMINISTRATIVE AGENT OR COLLATERAL AGENT IN THE STATE IN WHICH THE RESPECTIVE MORTGAGED PROPERTY OR COLLATERAL IS LOCATED OR ANY OTHER RELEVANT JURISDICTION AND (Y) IN THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY CREDIT PARTY, ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS) MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS OR THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 11.03 AND, IN THE CASE OF SERVICE OF PROCESS TO THE BORROWER, AS PROVIDED IN SECTION 11.18, IN EACH CASE SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER JURISDICTION.

          (b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          11.09. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be as effective as delivery of any original executed counterpart hereof.

          11.10. Effectiveness. This Agreement shall become effective on the date (the “Effective Date”) on which Holdings, the Borrower, the Administrative Agent and each of the Lenders shall have signed a copy of this Agreement (whether the same or different copies) and shall have delivered the same to the Administrative Agent at the Notice Office or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written telex or facsimile transmission notice (actually received) that the same has been signed and mailed to it. The Administrative Agent will give the Borrower and each Lender prompt written notice of the occurrence of the Effective Date.

          11.11. Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

          11.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Credit Parties party hereto or thereto and the Required Lenders (although additional parties may be added to (and schedules and annexes may be modified to reflect such additions), and Subsidiaries of the Borrower may be released from, the Security Documents in accordance with the provisions hereof and thereof without the consent of the other Credit Parties party thereto or the Required Lenders), provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with Obligations being directly affected in the case of following clause (i)), (i) extend the final scheduled maturity of any Term Loan or Note, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with the waiver of applicability of any post-default increase in interest rates), or reduce (or forgive) the principal amount thereof, (ii) release all or substantially all of the Collateral (except as expressly provided in the Credit Documents) under all the Security Documents, (iii) amend, modify or waive any provision of this Section 11.12(a) (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Commitments and the Term Loans on the Effective Date), (iv) release the Holdings Guaranty or release all or substantially all of the aggregate value of the Subsidiaries Guaranties, (v) reduce the “majority” voting threshold specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Commitments and/or Term Loans are included on the Effective Date) or (vi) consent to the assignment or transfer by Holdings or the Borrower of any of its rights and obligations under this Agreement; provided further, that no such change, waiver, discharge or termination shall (1) increase the Commitment of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available

portion of the Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (2) without the consent of the Administrative Agent, amend, modify or waive any provision of Section 10 or any other provision of this Agreement or any other Credit Document as same relates to the rights or obligations of the Administrative Agent or (3) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent.

          (b) If, in connection with any proposed change, waiver, discharge or termination of or to any of the provisions of this Agreement as contemplated by clauses (i) through (vi), inclusive, of the first proviso to Section 11.12(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then the Borrower shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described below, to replace each such non-consenting Lender or Lenders with one or more Replacement Lenders pursuant to Section 2.08 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination, provided further, that the Borrower shall not have the right to replace a Lender or repay its Term Loans solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Section 11.12(a).

          (c) Holdings, the Borrower and the Administrative Agent may, without the input or consent of the Lenders, effect technical amendments to this Agreement and the other Credit Documents as may be necessary or appropriate in the reasonable opinion of the Borrower and the Administrative Agent to effect the provisions of Section 2.10.

          11.13. Survival. All indemnities set forth herein including, without limitation, in Sections 2.09, 4.04, 10.06 and 11.01 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Obligations.

          11.14. Domicile of Term Loans. Each Lender may transfer and carry its Term Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Term Loans pursuant to this Section 11.14 would, at the time of such transfer, result in increased costs under Section 2.09 or 4.04, from those being charged by the respective Lender prior to such transfer, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective transfer to the extent otherwise required under any such Section).

          11.15. Register. The Borrower hereby designates the Administrative Agent to serve as its agent, solely for purposes of this Section 11.15, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, the Term Loans made by each of the Lenders (including any increases to the principal amounts thereof as a result of payment of PIK Interest) and each repayment in respect of the principal amount of the Term Loans of each Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations in respect of such Term Loans. With respect to any Lender, the transfer of the Commitment of such Lender and the rights to the principal of, and interest on, any Term Loan made pursuant to such Commitment shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitment and Term Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitment and Term Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Term Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or

part of a Term Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note evidencing such Term Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 11.15.

          11.16. Confidentiality. (a) Subject to the provisions of clause (b) of this Section 11.16, each Lender agrees that it will not disclose without the prior consent of the Borrower (other than to its employees, auditors, advisors or counsel or to another Lender if such Lender or such Lender’s holding or parent company in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender) any information with respect to Holdings or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document, provided that any Lender may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 11.16(a) by the respective Lender, (ii) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender or to comply with a request by a Governmental Authority, (v) to the Administrative Agent or the Collateral Agent, (vi) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 11.16, (vii) in connection with the enforcement of remedies pursuant to this Agreement and the other Credit Documents, (viii) to any prospective or actual transferee, pledgee or participant in connection with any contemplated transfer, pledge or participation of any of the Notes or Commitments or any interest therein by such Lender; provided that such prospective transferee, pledgee or participant agrees to be bound by the confidentiality provisions contained in this Section 11.16, (ix) to (A) any bank or financial institution and (B) S&P, ▇▇▇▇▇’▇, ▇▇▇▇▇ Ratings and/or other ratings agencies, as such Lender deems necessary or appropriate in connection with such Lender’s obtaining financing; provided, however, that such financial institution or ratings agency shall be informed of the confidentiality of such information and (x) to its investors or potential investors as such Lender reasonably deems necessary or appropriate; provided, however, that such investors or potential investors shall be informed of the confidentiality of such information.

          (b) Each of Holdings and the Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates, and such Affiliates may share with such Lender, any information related to Holdings or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of Holdings and its Subsidiaries), provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender.

          (c) Notwithstanding anything to the contrary contained in this Section, each of Holdings and the Borrower hereby agrees that the Administrative Agent and its Affiliates may publicize its services in connection with this Agreement and the other Credit Documents and the transactions contemplated herein and therein, including, without limitation, through granting interviews with and providing information to the financial press and other media and by publicizing such services on its web-site or other electronic medium; provided, however, that the Administrative Agent and its Affiliates shall not publicize as contemplated above in this clause (c) until the earlier to occur of (i) the 5th day following the Funding Date and (ii) such date as when Holdings shall have publicly announced the

consummation of the Transaction. In addition, each of Holdings and the Borrower hereby authorizes the Administrative Agent to place a customary “tombstone” advertisement regarding this Agreement and the transactions contemplated herein related hereto in publications of its choice at the Borrower’s expense.

          11.17. Patriot Act. Each Lender subject to the USA PATRIOT ACT (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”) hereby notifies Holdings and the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Holdings, the Borrower and the other Credit Parties and other information that will allow such Lender to identify Holdings, the Borrower and the other Credit Parties in accordance with the Patriot Act.

          11.18. Process Agent. (a) Each Credit Party hereby irrevocably and unconditionally appoints CT Corporation with an office on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and its successors hereunder (the “Process Agent”), as its agent to receive on behalf of such Credit Party and its property all writs, claims, process, and summonses in any action or proceeding brought against such Credit Party in the State of New York. Such service may be made by mailing or delivering a copy of such process to any Credit Party in care of the Process Agent at the address specified above for the Process Agent, and such Credit Party irrevocably authorizes and directs the Process Agent to accept such service on its behalf. Failure by the Process Agent to give notice to the applicable Credit Party, or failure of the applicable Credit Party, to receive notice of such service of process shall not impair or affect the validity of such service on the Process Agent or any such Credit Party, or of any judgment based thereon. Each Credit Party covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents that may be necessary to continue the designation of the Process Agent above in full force and effect, and to cause the Process Agent to act as such. Each Credit Party hereto further covenants and agrees to maintain at all times an agent with offices in New York City to act as its Process Agent. Nothing herein shall in any way be deemed to limit the ability to serve any such writs, process or summonses in any other manner permitted by applicable law.

          (b) Each Credit Party that is not incorporated in England and Wales and that has executed, or will on the Funding Date execute, any Credit Document governed by the law of England and Wales irrevocably and unconditionally appoints the Borrower, with an office on the date hereof at ▇▇▇ ▇▇. ▇▇▇▇▇▇’▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, and its successors hereunder (the “UK Process Agent”), as its agent to receive on behalf of such Credit Party and its property all writs, claims, process, and summonses in any action or proceeding brought against such Credit Party in England and Wales. Such service may be made by mailing or delivering a copy of such process to any Credit Party in care of the U.K. Process Agent at the address specified above for the U.K. Process Agent, and such Credit Party irrevocably authorizes and directs the UK Process Agent to accept such service on its behalf. Failure by the UK Process Agent to give notice to such Credit Party, or failure of such Credit Party, to receive notice of such service of process shall not impair or affect the validity of such service on the UK Process Agent or any such Credit Party, or of any judgment based thereon. Each such Credit Party covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents that may be necessary to continue the designation of the U.K. Process Agent above in full force and effect, and to cause the U.K. Process Agent to act as such. Each such Credit Party hereto further covenants and agrees to maintain at all times an agent with offices in England to act as its UK Process Agent. Nothing herein shall in any way be deemed to limit the ability to serve any such writs, process or summonses in any other manner permitted by applicable law. If any person appointed as an agent for service of process pursuant to Section 5.20 is unable for any reason to act as agent for service of process, Holdings (on behalf of all such Credit Parties) shall immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Administrative Agent. In the event that Holdings fails to appoint such agent on terms acceptable to the Administrative Agent, the Administrative Agent shall have the right to appoint an agent on process.

          11.19. Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Credit Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Credit Parties in respect of any such sum due from it to the Administrative Agent or the Lenders hereunder or under the other Credit Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent from the Credit Parties in the Agreement Currency, the Credit Parties agree, jointly and severally, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such obligation was owing against such loss.

          11.20. Maximum Lawful Rate. Notwithstanding anything to the contrary contained in any Credit Document, the interest paid or agreed to be paid under the Credit Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans, or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

          11.21. INTERCREDITOR AGREEMENT. (a) EACH LENDER PARTY HERETO HEREBY AUTHORIZES THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT TO EXECUTE AND DELIVER THE INTERCREDITOR AGREEMENT AND UPON THE REQUEST OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT EACH AGREE TO EXECUTE AND DELIVER THE INTERCREDITOR AGREEMENT PROVIDED SUCH AGREEMENT IS IN FORM AND SUBSTANCE TO SATISFACTORY TO EACH SUCH AGENT AND EACH LENDER PARTY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT AT ALL TIMES FOLLOWING THE EXECUTION AND DELIVERY OF THE INTERCREDITOR AGREEMENT SUCH LENDER (AND EACH OF ITS SUCCESSORS AND ASSIGNS) SHALL BE BOUND BY THE TERMS THEREOF.

          (b) EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NO AGENT OR ANY OF AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT.

          SECTION 12. Holdings Guaranty.

          12.01. Guaranty. In order to induce the Administrative Agent, the Collateral Agent and the Lenders to enter into this Agreement and to extend credit hereunder, and to induce the other Guaranteed Creditors to enter into Hedging Agreements and in recognition of the direct benefits to be

received by Holdings from the proceeds of the Term Loans and the entering into of such Hedging Agreements, Holdings hereby agrees with the Guaranteed Creditors as follows: Holdings hereby unconditionally and irrevocably guarantees as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due and payable hereunder, Holdings, unconditionally and irrevocably, promises to pay such indebtedness to the Administrative Agent and/or the other Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Administrative Agent and the other Guaranteed Creditors in collecting any of the Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Borrower), then and in such event Holdings agrees that any such judgment, decree, order, settlement or compromise shall be binding upon Holdings, notwithstanding any revocation of this Holdings Guaranty or other instrument evidencing any liability of the Borrower, and Holdings shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

          12.02. Bankruptcy. Additionally, Holdings unconditionally and irrevocably guarantees the payment of any and all of the Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by the Borrower upon the occurrence of any of the events specified in Section 9.05, and irrevocably and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money of the United States.

          12.03. Nature of Liability. The liability of Holdings hereunder is primary, absolute and unconditional, exclusive and independent of any security for or other guaranty of the Guaranteed Obligations, whether executed by any other guarantor or by any other party, and the liability of Holdings hereunder shall not be affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, or (e) any payment made to any Guaranteed Creditor on the Guaranteed Obligations which any such Guaranteed Creditor repays to the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and Holdings waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction by the Guaranteed Creditors as contemplated in Section 12.05, or (g) any invalidity, irregularity or enforceability of all or any part of the Guaranteed Obligations or of any security therefor.

          12.04. Independent Obligation. The obligations of Holdings hereunder are independent of the obligations of any other guarantor, any other party or the Borrower, and a separate action or actions may be brought and prosecuted against Holdings whether or not action is brought against any other guarantor, any other party or the Borrower and whether or not any other guarantor, any other party or the Borrower be joined in any such action or actions. Holdings waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to Holdings.

          12.05. Authorization. Holdings authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

     (i) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this Holdings Guaranty shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

     (ii) take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

     (iii) exercise or refrain from exercising any rights against the Borrower, any other Credit Party or others or otherwise act or refrain from acting;

     (iv) release or substitute any one or more endorsers, guarantors, the Borrower, other Credit Parties or other obligors;

     (v) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower to its creditors other than the Guaranteed Creditors;

     (vi) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Guaranteed Creditors regardless of what liability or liabilities of the Borrower remain unpaid;

     (vii) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Credit Document, any Hedging Agreement or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Credit Document, any Hedging Agreement or any of such other instruments or agreements; and/or

     (viii) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of Holdings from its liabilities under this Holdings Guaranty.

          12.06. Reliance. It is not necessary for any Guaranteed Creditor to inquire into the capacity or powers of Holdings or any of its Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

          12.07. Subordination. Any indebtedness of the Borrower now or hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations owing to the Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of Default exists, all such indebtedness of the Borrower to Holdings shall be collected, enforced and received by Holdings for the benefit of the Guaranteed Creditors and be paid over to the Administrative Agent on behalf of the Guaranteed Creditors

on account of the Guaranteed Obligations to the Guaranteed Creditors, but without affecting or impairing in any manner the liability of Holdings under the other provisions of this Holdings Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument evidencing any such indebtedness of the Borrower to Holdings, Holdings shall ▇▇▇▇ such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, Holdings hereby agrees with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Holdings Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash.

          12.08. Waiver. (a) Holdings waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against the Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrower, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. Holdings waives any defense based on or arising out of any defense of the Borrower, any other guarantor or any other party, other than payment of the Guaranteed Obligations to the extent of such payment, based on or arising out of the disability of the Borrower, Holdings, any other guarantor or any other party, or the validity, legality or unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment of the Guaranteed Obligations to the extent of such payment. The Guaranteed Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of Holdings hereunder except to the extent the Guaranteed Obligations have been paid. Holdings waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Holdings against the Borrower or any other party or any security.

          (b) Holdings waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Holdings Guaranty, notices making any claim or demand in Holdings, and notices of the existence, creation or incurring of new or additional Guaranteed Obligations, and promptness in commencing suit against any party. Holdings assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which Holdings assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any of the other Guaranteed Creditors shall have any duty to advise Holdings of information known to them regarding such circumstances or risks.

          (c) Holdings waives any defense (i) based on any lack of authority of the officers, directors, partners, or agents purporting to act on behalf any of its Subsidiaries or any principal of any of its Subsidiaries or any defect in the formation of any of its Subsidiaries or any principal thereof, (ii) based on the application by the Borrower of the proceeds of the Term Loans for purposes other than the purposes represented by the Borrower to the Lenders, (iii) based on any statute or rule of law that provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal, (iv) based on a Lender’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111 subdivision (b)(2) of the Bankruptcy Code or any successor statute and (v) any borrowing or any grant of security interest under Section 364 of the Bankruptcy Code.

          12.09. Payments. All payments made by Holdings pursuant to this Section 12 shall be made in Dollars and will be made without setoff, counterclaim or other defense, and shall be subject to the provisions of Sections 4.03 and 4.04.

          12.10. Maximum Liability. It is the desire and intent of Holdings and the Guaranteed Creditors that this Holdings Guaranty shall be enforced against Holdings to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If, however, and to the extent that, the obligations of Holdings under this Holdings Guaranty shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers), then the amount of Holdings’ obligations under this Holdings Guaranty shall be deemed to be reduced and Holdings shall pay the maximum amount of the Guaranteed Obligations which would be permissible under applicable law.

* * *

     IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

TABLE OF CONTENTS

				Page
SECTION 1.		Definitions and Accounting Terms			1
1.01.		Defined Terms			1
SECTION 2.		Amount and Terms of Credit			30
2.01.		The Commitments			30
2.02.		Notice of Borrowing			31
2.03.		Disbursement of Funds			31
2.04.		Notes			32
2.05.		Pro Rata Borrowings			32
2.06.		Interest			32
2.07.		Change of Lending Office			33
2.08.		Replacement of Lenders			33
2.09.		Capital Adequacy			34
2.10.		Incremental Term Loans			34
SECTION 3.		Fees; Reductions of Commitment			35
3.01.		Fees			35
3.02.		Voluntary Termination or Reduction of Commitments			35
3.03.		Mandatory Reduction of Commitments			35
SECTION 4.		Prepayments; Payments; Taxes			35
4.01.		Voluntary Prepayments			35
4.02.		Mandatory Repayments			36
4.03.		Method and Place of Payment			38
4.04.		Tax Gross-Up and Indemnities			38
SECTION 5.		Conditions Precedent to the Funding Date			40
5.01.		Effective Date; Notes			40
5.02.		Officer’s Certificate			40
5.03.		Opinions of Counsel			41
5.04.		Company Documents; Proceedings; etc.			41
5.05.		Employee Benefit Plans; Shareholders’ Agreements; Management Agreements; Employment Agreements; Collective Bargaining Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements; Project Documents			41
5.06.		Consummation of the Refinancing			42
5.07.		Adverse Change, Approvals			43
5.08.		Litigation			44
5.09.		Guaranties and Security Documents			44
5.10.		[Reserved]			46
5.11.		Financial Statements; Pro Forma Balance Sheet; Projections etc.			46
5.12.		Solvency Certificate; Insurance Certificates			46
5.13.		Reserve Report; Qualifications			47
5.14.		Fees, etc.			47
5.15.		Syndication Letter			47

				Page
5.16.		No Default; Representations and Warranties			47
5.17.		Notice of Borrowing			47
5.18.		Patriot Act; Know Your Customer			47
5.19.		Service of Process			47
5.20.		U.K. Service of Process			47
SECTION 6.		Representations, Warranties and Agreements			48
6.01.		Company Status			48
6.02.		Power and Authority			48
6.03.		No Violation			48
6.04.		Approvals			49
6.05.		Financial Statements; Financial Condition; Undisclosed Liabilities; Projections			49
6.06.		Litigation			50
6.07.		True and Complete Disclosure			50
6.08.		Use of Proceeds; Margin Regulations			50
6.09.		Tax Returns and Payments			51
6.10.		Compliance with ERISA			51
6.11.		Security Documents			52
6.12.		Properties			53
6.13.		Capitalization			54
6.14.		Subsidiaries			55
6.15.		Compliance with Statutes, etc.			55
6.16.		Investment Company Act			55
6.17.		Environmental Matters			55
6.18.		Employment and Labor Relations			56
6.19.		Intellectual Property, etc.			57
6.20.		Indebtedness			57
6.21.		Insurance			57
6.22.		Holding Company			57
6.23.		Immaterial Subsidiaries			57
SECTION 7.		Affirmative Covenants			57
7.01.		Information Covenants			57
7.02.		Books, Records and Inspections; Annual Meetings			61
7.03.		Maintenance of Property; Insurance			61
7.04.		Existence; Franchises; Oil and Gas Properties			61
7.05.		Compliance with Statutes, etc.			62
7.06.		Compliance with Environmental Laws			62
7.07.		ERISA			63
7.08.		End of Fiscal Years; Fiscal Quarters			64
7.09.		Performance of Obligations			65
7.10.		Payment of Taxes			65
7.11.		Use of Proceeds			65
7.12.		Additional Security; Further Assurances; etc.			65
7.13.		Ownership of Subsidiaries; etc.			66
7.14.		Qualified Preferred Stock			67
7.15.		Maintenance of Company Separateness			67
7.16.		Board Information Rights			67
7.17.		Permitted Acquisitions			67
7.18.		Commodity Hedging Agreements			68
7.19.		Project Documents, etc.			69
7.20.		Oil and Gas Properties			69

				Page
7.21.		Listing of the Notes			69
SECTION 8.		Negative Covenants			70
8.01.		Liens			70
8.02.		Consolidation, Merger, Purchase or Sale of Assets, etc.			73
8.03.		Dividends			75
8.04.		Indebtedness			76
8.05.		Advances, Investments and Loans			78
8.06.		Transactions with Affiliates			79
8.07.		Capital Expenditures			80
8.08.		Maximum Total Leverage Ratio			81
8.09.		Minimum EBITDAX			82
8.10.		Minimum Asset Coverage Ratios			82
8.11.		Limitations on Prepayments of Junior Financing; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc.			82
8.12.		Limitation on Certain Restrictions on Subsidiaries			83
8.13.		Limitation on Issuance of Equity Interests			84
8.14.		Business			84
8.15.		Limitation on Creation of Subsidiaries			84
8.16.		Limitation on Commodity Hedging			85
8.17.		Elections			85
SECTION 9.		Events of Default			85
9.01.		Payments			85
9.02.		Representations, etc.			85
9.03.		Covenants			85
9.04.		Default Under Other Agreements			86
9.05.		Bankruptcy, etc.			86
9.06.		ERISA			86
9.07.		Security Documents			87
9.08.		Guaranties			87
9.09.		Judgments			87
9.10.		Nationalization			87
9.11.		Project Documents			87
9.12.		Change of Control			88
SECTION 10.		The Administrative Agent			88
10.01.		Appointment			88
10.02.		Nature of Duties			89
10.03.		Lack of Reliance on the Administrative Agent			89
10.04.		Certain Rights of the Agents			90
10.05.		Reliance			90
10.06.		Indemnification			90
10.07.		Each Agent in its Individual Capacity			90
10.08.		Holders			90
10.09.		Resignation by the Administrative Agent			91
10.10.		Collateral Matters			91
10.11.		Delivery of Information			92
SECTION 11.		Miscellaneous			92
11.01.		Payment of Expenses, etc.			92

				Page
11.02.		Right of Setoff			94
11.03.		Notices			94
11.04.		Benefit of Agreement; Assignments; Participations			94
11.05.		No Waiver; Remedies Cumulative			96
11.06.		Payments Pro Rata			96
11.07.		Calculations; Computations			97
11.08.		GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL			97
11.09.		Counterparts			99
11.10.		Effectiveness			99
11.11.		Headings Descriptive			99
11.12.		Amendment or Waiver; etc.			99
11.13.		Survival			100
11.14.		Domicile of Term Loans			100
11.15.		Register			100
11.16.		Confidentiality			101
11.17.		Patriot Act			102
11.18.		Process Agent			102
11.19.		Judgment Currency			103
11.20.		Maximum Lawful Rate			103
11.21.		INTERCREDITOR AGREEMENT			103
SECTION 12.		Holdings Guaranty			103
12.01.		Guaranty			103
12.02.		Bankruptcy			104
12.03.		Nature of Liability			104
12.04.		Independent Obligation			104
12.05.		Authorization			105
12.06.		Reliance			105
12.07.		Subordination			105
12.08.		Waiver			106
12.09.		Payments			107
12.10.		Maximum Liability			107

SCHEDULE 1.01(a)		Commitments
SCHEDULE 1.01(b)		Subsidiary Guarantors
SCHEDULE 5.09(g)		Accounts
SCHEDULE 6.10(a)		Plans
SCHEDULE 6.12(a)		Leased Real Property (other than Oil and Gas Properties)
SCHEDULE 6.12(b)		Oil and Gas Properties
SCHEDULE 6.13		Capitalization
SCHEDULE 6.14		Subsidiaries
SCHEDULE 6.20		Existing Indebtedness
SCHEDULE 6.21		Insurance
SCHEDULE 8.01(b)		Existing Liens
SCHEDULE 8.05(c)		Existing Investments
SCHEDULE 8.12		Existing Encumbrances or Restrictions
SCHEDULE 11.03		Lender Addresses
EXHIBIT A		Form of Notice of Borrowing
EXHIBIT B		Form of Note
EXHIBIT C-1		Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, Special New York and Texas Counsel to the Credit Parties
EXHIBIT C-2		Opinion of ▇▇▇▇▇▇▇▇ and Wedge, Special Nevada Counsel to the Credit Parties
EXHIBIT C-3		Opinion of ▇▇▇▇▇ Dutilh, Special Dutch Counsel to the Agents
EXHIBIT C-4		Opinion of White & Case LLP, Special English Counsel to the Agents
EXHIBIT D-1		Form of Officer’s Certificate (U.S.)
EXHIBIT D-2		Form of Officer’s Certificate (English)
EXHIBIT D-3		Form of Officer’s Certificate (Dutch)
EXHIBIT E		Form of Subsidiaries Guaranty
EXHIBIT F-1		Form of U.S. Security Agreement
EXHIBIT F-2		Form of English Debenture
EXHIBIT F-3		Form of English Charge Over Shares
EXHIBIT F-4		Form of Dutch Pledge Agreement
EXHIBIT F-5		Form of Scottish Security
EXHIBIT G		Form of Solvency Certificate
EXHIBIT H		Form of Compliance Certificate
EXHIBIT I		Form of Assignment and Assumption Agreement
EXHIBIT J		Form of Intercompany Note

Schedule 1.01(a)
Commitments

Lender		Term Loan Commitment
CYRUS OPPORTUNITIES FUND II, L.P.		$	18,050,000
CYRUS EUROPE FUND, L.P.		$	950,000
▇▇▇▇▇▇▇▇ ▇, ▇.▇.		$	38,000,000
▇▇▇ FUND, L.P.		$	37,500,000
CYRUS CAPITAL PARTNERS, L.P.		$	500,000
MTP ENERGY INFRASTRUCTURE FINANCE MASTER FUND, LTD.		$	11,500,000
TRIANGLE PEAK PARTNERS PRIVATE EQUITY, LP		$	3,500,000
HELIOS CORPORATE LLC		$	20,000,000
THE ROTHSCHILD FOUNDATION EUROPE		$	2,000,000
DODER TRUST LIMITED (AS TRUSTEE FOR THE JADER TRUST NO 4)		$	9,000,000
DODER TRUST LIMITED (AS TRUSTEE FOR THE BAT HANADIV FOUNDATION NO 3)		$	9,000,000
TOTAL:		$	150,000,000

Schedule 1.01(b)
Subsidiary Guarantors

1)		Endeavour Energy North Sea LLC (Delaware)
2)		Endeavour Energy North Sea, L.P. (Delaware)
3)		Endeavour Operating Corporation (Delaware)
4)		Endeavour International Holding B.V. (Netherlands)
5)		Endeavour Energy Netherlands B.V. (Netherlands)
6)		Endeavour Energy New Ventures Inc. (Delaware)
7)		END Management Company (Delaware)

Schedule 5.09(g)
Accounts

Deposit Accounts

Credit Party		Sort Code		Bank Account Number				Designation		Location of Account
Endeavour Energy UK Limited		JPMorgan Chase Bank, N.A., London Branch 60-92-42			35047501			UK Operations in GBP		Bournemouth, England
Endeavour Energy UK Limited		JPMorgan Chase Bank, N.A., London Branch 60-92-42			35047502			UK Operations in USD		Bournemouth, England
Endeavour Operating Corporation		JPMorgan Chase Bank, N.A.			179910996265			Operating Account		Houston, Texas
Endeavour Operating Corporation		JPMorgan Chase Bank, N.A.			▇▇▇-▇▇▇-▇▇▇			Demand Deposit Account		Houston, Texas

Schedule 6.10(a)
Plans

None.

Schedule 6.12(a)
Leased Real Property

Leased Real Property of the Credit Parties

	1.		14,514 sq. ft. of rentable area on Floor 16 of the First City Tower Building, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, leased through December 1, 2010;
	2.		The fourth, fifth, and ground floors of the building known as ▇▇▇ ▇▇ ▇▇▇▇▇▇’▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, leased through December 12, 2012;
	3.		▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, leased through June 11, 2013; and
	4.		5,025 sq. ft. of rentable area at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, leased through December 31, 2011.

SCHEDULE
6.12(b)
Oil and Gas
Properties

Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds

Property Name
UK:
Alba						*
Bacchus						*
Bittern						*
Columbus						*
Cygnus						*
Enoch						*
Goldeneye						*
IVRRH						*
▇▇▇▇▇						*
▇▇▇▇▇▇▇▇						*
▇▇▇▇▇						*
US:
Austin 21 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇▇▇▇▇ 3-1H		Red River		Louisiana		*
▇▇▇▇▇, ▇ ▇ 20 #1D		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇, ▇ ▇ 20 #1D PNP		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇▇ Investment Co LLC 35 #1		Caddo		Louisiana		*
Chiggero ETAL 14 #1-H		Caddo		Louisiana		*
▇▇▇▇▇ 15 #1		Red River		Louisiana		*
Desoto LP 17 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇ ▇▇▇▇ ▇▇-▇▇		▇▇▇ ▇▇▇▇▇		Louisiana		* 1
▇▇▇▇▇▇▇, ▇▇▇▇▇ 15 #1		Caddo		Louisiana		*
▇▇▇▇▇▇▇ 3 #2		De ▇▇▇▇		Louisiana		*
Indigo Minerals 3-1H		Red River		Louisiana		*
International Paper 21 #1		De ▇▇▇▇		Louisiana		*

SCHEDULE
6.12(b)
Oil and Gas
Properties

Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds

Property Name
▇▇▇▇▇▇▇, A S ET AL 10 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇, ▇ ▇ ▇▇ #▇		▇▇ ▇▇▇▇		▇▇▇▇▇▇▇▇▇		*
▇▇▇▇▇, ▇ ▇ ▇▇ #▇		▇▇ ▇▇▇▇		▇▇▇▇▇▇▇▇▇		*
▇▇▇▇▇, ▇ ▇ ▇▇ #▇		▇▇ ▇▇▇▇		▇▇▇▇▇▇▇▇▇		*
Little 11 #1		Red River & Bienville		Louisiana		*
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 2 #1		Red River		Louisiana		*
▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇ #▇		▇▇▇ ▇▇▇▇▇		▇▇▇▇▇▇▇▇▇		*
▇▇▇▇▇ 23 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇▇▇ HNSVL 14 #5H		Caddo		Louisiana		*
▇▇▇▇▇▇▇, ▇▇▇▇ 3 #1		Red River		Louisiana		*
▇▇▇▇▇, Lillie22 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇ 3 #1		De ▇▇▇▇		Louisiana		*
▇▇▇▇▇ Cowbell		Lea		New Mexico
Lucky ▇▇▇▇▇		▇▇▇		New Mexico
▇▇▇▇▇▇ & Curtain Lumber Co. C-4		Cameron		Pennsylvania		* 1
▇▇▇▇▇▇ & Curtain Lumber Co. C-5		Cameron		Pennsylvania		* ▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇-▇▇		▇▇▇▇▇▇▇		▇▇▇▇▇▇▇▇▇▇▇▇		* ▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇-▇▇		▇▇▇▇▇▇▇		▇▇▇▇▇▇▇▇▇▇▇▇		* 1
▇▇▇▇▇▇ & Curtain Lumber Co. C-10-H		Cameron		Pennsylvania		* 1
▇▇▇▇▇▇▇ 1 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇▇ 2 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇▇ 3 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇▇ 4 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇▇ 5 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇▇ 6 (▇▇▇▇▇▇▇)		Colorado		Texas		*
▇▇▇▇▇▇ #6H — 6 Stages		▇▇▇▇▇		Texas		*
▇▇▇▇▇▇ #8H — 6 Stages		▇▇▇▇▇		Texas		*
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ #▇		▇▇▇▇▇		▇▇▇▇▇		*
▇▇▇▇▇▇, ▇ ▇ #7H		▇▇▇▇▇		Texas		*
▇▇▇▇▇▇▇▇ #3		▇▇▇▇▇		Texas		*
Armour ▇▇▇▇▇▇▇ 1		Matagorda		Texas

SCHEDULE
6.12(b)
Oil and Gas
Properties

Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds

Schedule 6.13
Capitalization

Part I: Equity Ownership of Subsidiaries

Class of Equity

Par

Number of

Certificate

Percentage of

Owner

Issuer

Interest

Value

Shares

Number

outstanding shares

Endeavour

Endeavour Operating

International

Corporation

Corporation

Common

$

0.001

100

2

100

Endeavour Operating

Endeavour

Corporation

International

Holding B.V.

Ordinary

€

100

180

Uncertificated

100

Endeavour Operating

Endeavour Energy

Corporation

New Ventures Inc.

Common

$

0.01

1,000

1

100

Endeavour Operating

END Management

Corporation

Company

Common

$

0.01

1,000

1

100

Endeavour Operating

Endeavour Energy

Corporation

New Ventures I,

Ltd.

Ordinary

$

1.00

1

Uncertificated

100

Endeavour

Endeavour Energy

Limited Partnership

International

North Sea, L.P.

Interest

Holding B.V.

N/A

N/A

Uncertificated

99.9

Endeavour

Endeavour Energy

International

Netherlands B.V.

Holding B.V.

Ordinary

€

100

180

Uncertificated

100

Endeavour

Endeavour Energy

International

Luxembourg S.a.r.l.

Holding B.V.

Ordinary

N/A

500

Uncertificated

100

Class of Equity

Par

Number of

Certificate

Percentage of

Owner

Issuer

Interest

Value

Shares

Number

outstanding shares

Endeavour Energy UK

Endeavour North Sea

Limited

Limited

Ordinary

₤

1

44,250,002

5

100

Endeavour Energy

Endeavour Energy

Netherlands B.V.

North Sea LLC

Membership Interest

N/A

N/A

Uncertificated

100

Endeavour Energy

Endeavour Energy

General Partnership

North Sea LLC

North Sea, L.P.

Interest

N/A

N/A

Uncertificated

0.1

Endeavour Energy

Endeavour Energy UK

North Sea, L.P.

Limited

Ordinary

₤

0.10

1,200

8, 9, and 10

100

Schedule 6.13
Part II: Convertible Securities

The Credit Parties have issued the following securities that are convertible into Equity Interests:

	1)		6.00% Convertible Senior Notes due 2012, issued by Endeavour International Corporation;
	2)		11.50% Convertible Bonds due 2014, issued by Endeavour Energy Luxembourg S.a.r.l. and guaranteed by Endeavour International Corporation;
	3)		Series C Preferred Stock, issued by Endeavour International Corporation with the terms set forth in the Certificate of Designation of Series C Preferred Stock originally filed with the Nevada Secretary of State on October 30, 2006;
	4)		Warrant No. 2003-3 for Trident Growth Fund, L.P. to purchase 150,000 shares of Common Stock in Endeavour International Corporation, as amended to expire April 30, 2012 by the First Amendment thereto, with 40,000 warrants currently outstanding thereunder; and
	5)		Warrant No. 2002-1 for Trident Growth Fund, L.P. to purchase 150,000 shares of Common Stock in Endeavour International Corporation expiring April 30, 2012, as amended to date, with 50,000 warrants currently outstanding thereunder.

Schedule 6.13
Part III: Options

		Options currently
Plan Name		Outstanding
Endeavour International Corporation 2004 Incentive Plan, as amended			745,700
Endeavour International Corporation 2007 Stock Incentive Plan			2,001,055
Nonstatutory Stock Option Agreement between Endeavour International Corporation and ▇▇▇▇ ▇. ▇▇▇▇▇, dated November 3, 2008 (one-year)			50,000
Nonstatutory Stock Option Agreement between Endeavour International Corporation and ▇▇▇▇ ▇. ▇▇▇▇▇, dated November 3, 2008 (three-year)			200,000
Nonstatutory Stock Option Agreement between Endeavour International Corporation and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated September 26, 2007			400,000
Nonstatutory Stock Option Agreement between Endeavour International Corporation and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, dated October 1, 2007			200,000
Total			3,596,755

Schedule 6.14
Subsidiaries

This Schedule 6.14 incorporates the relevant portions of the Credit Parties’ response to Schedule 6.13.

Schedule 6.20
Existing Indebtedness

Holdings has Indebtedness pursuant to its 6.00% Convertible Senior Notes due 2012, in a principal amount of $81,250,000.

Holdings also has Indebtedness pursuant to its 12.00% Senior Subordinated Notes due 2014, in a principal amount of $50,373,000, which Indebtedness is guaranteed by all U.S. Subsidiaries of Holdings.

Endeavour Energy Luxembourg S.a.r.l. has Indebtedness pursuant to its 11.50% Convertible Bonds due 2014, in a principal amount of $51,271,000, which Indebtedness is guaranteed by Holdings.

Series C Preferred Stock, issued by Holdings, with the terms set forth in the Certificate of Designation of Series C Preferred Stock originally filed with the Nevada Secretary of State on October 30, 2006, as amended.

The Credit Parties have the following outstanding Letters of Credit:

Title		Amount		Borrower
Standby Letter of Credit (BNP Paribas)		£11,900,000		Endeavour Energy UK Limited
Standby Letter of Credit (BNP Paribas)		£6,600,000		Endeavour Energy UK Limited
Standby Letter of Credit (BNP Paribas)		£2,100,000		Endeavour Energy UK Limited

This Schedule 6.20 incorporates all Intercompany Loans as specified on Schedule 8.05(c), Part II.

Schedule 6.21

Coverage Summary

Policy Period		Policy No.		Coverage		Limits/Amounts						Carrier
11/01/09-10		61SBARS0904		Property		Business Personal Property						Hartford Lloyds Insurance
						$	100,500			Replacement Cost		Company (Direct)
				Houston/ Denver		Personal Property of Others
						$	189,500			Replacement Cost
						Money and Securities
						$	10,000			Inside the Premises
						$	5,000			Outside the Premises
						Computers and Media
						$	350,000			12 Hour Waiting Period, $250 Deductible
						Deductibles:
						$	1,000			Per Occurrence
11/01/09-10		MU05540661		USA - General Liability		$	2,000,000			General Aggregate		St. ▇▇▇▇ Surplus Lines
						$	1,000,000			Products-Completed Operations Aggregate Limit		Insurance Company (through
						$	1,000,000			Personal and Advertising Injury Limit		▇.▇. ▇▇▇▇▇▇)
						$	1,000,000			Each Occurrence Limit
						$	100,000			Damage To Premises Rented To You Limit (Any One Premise)
						$	5,000			Medical Expenses Limit (Any One Person)
						Deductibles:
						$	5,000			Each Event
						$	10,000			Each Offshore Event
						$	5,000			Each Event Products-Completed Operations
						$	10,000			Each Offshore Event Products-Completed Operations
						$	0			Medical Expense (Each Person)
						$	5,000			Personal and Advertising Injury (Each Person)
11/01/09-10		MU05578407		USA - Umbrella Liability		$	9,000,000			General Aggregate		St. ▇▇▇▇ Surplus Lines
						$	9,000,000			Products-Completed Operations Aggregate Limit		Insurance Company (through
						$	9,000,000			Personal and Advertising Injury Limit		▇.▇. ▇▇▇▇▇▇)
						$	9,000,000			Each Occurrence Limit
						Deductibles:
						$	10,000			Deductible (SIR)
11/01/▇▇-▇▇		▇▇▇▇▇▇▇▇ ENP		London Computer		£	258,360			Computer and ancillary equipment (London) including Portable Equipment Value £20,000		Aviva Insurance UK Ltd (GA) (through Castle Cairn
						£	90,380			Computer and ancillary equipment (Aberdeen) including Portable Equipment Value £20,000		Insurance Brokers Ltd.)
11/01/09-10		GLA/003897736		London Office Package		Property Section:						NIG Insurance (through
						£	100,000			Office Contents (excluding computers)		Castle Cairn Insurance
						£	50,000			Aberdeen Contents (excluding computers)		Brokers Ltd.)
						£	10,000			Documents
						£	5,000			Goods in Transit
						£	5,000			Exhibitions in UK
						£	1,000			Replacement Locks
						£	500			Personal effects (per person)
						£	5,000			Pictures, Works of Art, etc (£500 AOI)
						£	5,000			Computer system records
						£	5,000			Loss of Metered Water
						Business Interruption Section:
						£	250,000			Loss of Revenue and Increased Costs of Working
						£	5,000			Book Debts
						12 Months				Indemnity Period
						Money Section:
						£	250,000			Loss of Money due to Crossed cheques
						£	250			Money Out of Safe out of Business Hours
						£	1,500			Money In Safe out of Business Hours
						£	500			Money in the Private Dwelling of Partners, Directors or Employees